FEDERAL COURT OF AUSTRALIA Australian Competition and Consumer Commission v Chaste Corporation Pty Ltd (No 2) [2012] FCA 134 Citation: Australian Competition and Consumer Commission v Chaste Corporation Pty Ltd (No 2) [2012] FCA 134 Parties: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v CHASTE CORPORATION PTY LTD (DEREGISTERED) ACN 089 837 239, BRADDON RALPH WEBB, ORLAWOOD PTY LTD ACN 059 294 334, PETER CLARENCE FOSTER, SEAN PETRIE ALLEN COUSINS, CONSTANTINE XENOUDAKIS, KEVIN ANTHONY MCMULLAN, ALAN KENNETH COOPER and STEPHEN D'ALTON File number: QUD 252 of 2001 Judges: LOGAN J Date of judgment: 9 February 2012 Catchwords: CONTEMPT – application for adjournment of criminal contempt proceeding pending hearing and determination of civil proceeding – allegation of conduct in civil proceedings forming part of factual basis for contempt charge – relevant considerations for expediting contempt proceeding – due weight to public interest - application to adjourn contempt proceedings refused Legislation: Competition and Consumer Act 2010 (Cth) Evidence Act 1995 (Cth) Trade Practices Act 1974 (Cth) Criminal Code Act 1899 (Qld) Public Service Act 1996 (Qld) Cases cited: Bannister v Director-General, Department of Corrective Services (2005) 1 QR 117 considered Black & White Cab Co Pty Limited v Kelk (1984) 2 QR 484 considered Briginshaw v Briginshaw (1938) 60 CLR 336 applied Jefferson Ltd v Bhetcha (1979) 1 WLR 898 considered McMahon v Gould (1982) 7 ACLR 202 considered Yuill v Spedley Securities Ltd (in liq) (1992) 8 ACSR 272 considered Date of hearing: 9 February 2012 Place: Brisbane Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 25 Counsel for the Applicant: Mr D Kent Solicitor for the Applicant: Corrs Chambers Westgarth Counsel for the Respondents: Mr PE Smith Solicitor for the Respondents: Fisher Dore Lawyers IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 252 of 2001 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: CHASTE CORPORATION PTY LTD (DEREGISTERED) ACN 089 837 239 First Respondent BRADDON RALPH WEBB Second Respondent ORLAWOOD PTY LTD ACN 059 294 334 Third Respondent PETER CLARENCE FOSTER Fourth Respondent SEAN PETRIE ALLEN COUSINS Fifth Respondent CONSTANTINE XENOUDAKIS Sixth Respondent KEVIN ANTHONY MCMULLAN Seventh Respondent ALAN KENNETH COOPER Eighth Respondent STEPHEN D'ALTON Ninth Respondent JUDGE: LOGAN J DATE OF ORDER: 9 FEBRUARY 2012 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The interlocutory application is dismissed. 2. The applicant is to inform the Court at the directions hearing set down for 10 February 2012 in matter NSD1163 of 2011, Australian Competition and Consumer Commission v Sensaslim Australia Pty Ltd (Administrators Appointed) ACN 140 333 133 & Ors that for reasons given extempore adjournment of the contempt charge in matter QUD252 of 2001, Australian Competition and Consumer Commission v Chaste Corporation Pty Ltd (ACN 089 837 329) & Ors was refused on 9 February 2012. 3. The matter is set down for a trial commencing 19 March 2012 with 20, 21, 22, 23, 26 and 27 March 2012 and, if required, 3 and 4 April 2012 being reserved for that trial. 4. The fourth respondent is to give notice in writing of such, if any, of the deponents of affidavits filed on behalf of the applicant as are required for cross-examination on or before 5 March 2012. 5. An application for adjournment of the hearing fixed to commence on 19 March 2012 on grounds related to ability of Mr Foster to prepare for trial having regard to availability of legal aid is to be heard on 14 February 2012 at 10:15am. 6. The oral application for such an adjournment made today by Mr Foster by his counsel is deemed sufficient and the need for filing of a written interlocutory application is dispensed with. However, any affidavit in support is to be filed and served by 4:00pm on 13 February 2012. 7. The costs of and incidental to application for adjournment heard today be the applicant's costs in the proceedings. Otherwise costs are reserved. 8. Liberty is to apply. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011 IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 252 of 2001 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: CHASTE CORPORATION PTY LTD (DEREGISTERED) ACN 089 837 239 First Respondent BRADDON RALPH WEBB Second Respondent ORLAWOOD PTY LTD ACN 059 294 334 Third Respondent PETER CLARENCE FOSTER Fourth Respondent SEAN PETRIE ALLEN COUSINS Fifth Respondent CONSTANTINE XENOUDAKIS Sixth Respondent KEVIN ANTHONY MCMULLAN Seventh Respondent ALAN KENNETH COOPER Eighth Respondent STEPHEN D'ALTON Ninth Respondent JUDGE: LOGAN J DATE: 9 FEBRUARY 2012 PLACE: BRISBANE REASONS FOR JUDGMENT 1 Mr Foster is a respondent to a charge of contempt, which the Australian Competition and Consumer Commission have brought against him in this proceeding, by which, in the ways alleged in the charge, it is said that he has violated the terms of orders made by Lander J earlier in the proceeding. The contempt charge was filed initially in the New South Wales registry of the court on 11 November 2011. On its filing an order was made by the Court for Mr Foster's arrest. 2 Mr Foster came to be brought before the Court pursuant to that arrest order on 22 November 2011. He sought an order that he be released pending the hearing and determination of the contempt charge. Such an order was made on 9 December 2011. At that time, directions for the further conduct of the contempt charge proceeding were made. These reasons for judgment should be read in conjunction with the reasons for judgment published that day, in respect of the ordering of Mr Foster's release: see Australian Competition and Consumer Commission v Chaste Corporation Pty Ltd [2011] FCA 1431. 3 Prior to the institution of the contempt proceedings, the Commission had instituted proceedings in the Court, in the matter number NSD1163 of 2011, against five respondents Sensaslim Australia Proprietary Limited (in liquidation), Mr Foster, a Mr Peter Leslie O'Brien, a Mr Adam Troy Adams and a Mr Michael Anthony Boyle. Those proceedings were instituted in the Court's New South Wales registry on 15 July 2011. In those proceedings, the Commission seeks declaratory and injunctive relief, as well as the imposition of civil penalties and ancillary relief under what was, at the time of the conduct alleged, known as the Trade Practices Act 1974 (Cth), since renamed the Competition and Consumer Act 2010 (Cth). 4 A chronology of events which have transpired on and from the institution of the civil penalty proceeding in the New South Wales registry and the criminal contempt proceeding now in this registry forms part of the applicant's submissions today. The events there related are common ground. I incorporate the chronology concerned by reference as a schedule to these reasons for judgment. 5 The application today on behalf of Mr Foster is an unusual and indeed, so far as the researches of counsel and myself are concerned, an unprecedented one, but none the worse for that. Mr Foster applies for the adjournment of the hearing and determination of the criminal contempt charge pending the hearing and determination of the civil penalty proceedings. It is common ground that there is an overlap in the factual substratum of the allegations which form the basis of the criminal contempt charge and the allegations which form the basis of the civil penalty proceeding. Further, on closer analysis of the amended application in the civil proceeding, it can be seen that allegations in that proceeding which do not involve a direct allegation against Mr Foster nonetheless entail proof of conduct on his part. 6 The factual bases upon which the civil penalty allegations are premised are nonetheless wider than those which underpin the criminal contempt charge. Even so, the essence, of that contempt charge is an allegation of conduct which forms part of the allegations in the civil penalty proceeding. That essence is that by the conduct alleged in the criminal contempt charge there was a violation of the orders made by Lander J on the part of Mr Foster. 7 The civil penalty proceedings are presently on the docket of Yates J. They are next due for directions before his Honour tomorrow. The Commission's estimate, at present, of the length of time it would take to hear the civil penalty proceeding is two to three weeks. Quite when a hearing of that length could be offered in the Court's New South Wales registry, either by his Honour as the docket judge or otherwise, is not presently known with any degree of precision. It does though seem unlikely that the civil penalty proceeding could be heard in or about mid-March of this year. 8 A hearing in respect of the criminal contempt charge was offered by the Court to occur in the middle of this month. That proved too soon in terms of the ability of the parties to present their cases, particularly, it must be said, Mr Foster, in terms of his ability with any reasonable certainty not only to secure a grant of legal aid, but also, if such a grant were made, to prepare a case in his defence in time. By the fortuitous circumstance of the course of events in respect of another case on my docket, it is possible for me to embark upon a hearing of the criminal contempt charge on 19 March 2012. The estimate at present of those advising Mr Foster is that some five days would be required. The Commission gave as its estimate six to seven days. 9 It is likely that a trial of that length would be able to be heard if it were to commence on 19 March 2012. In other words, there is a likelihood that the criminal contempt charge would be able to be heard prior to the civil penalty proceeding. It by no means follows from this that the application made today by Mr Foster should fail, although the likelihood of being able earlier to entertain a hearing of the criminal contempt charge is relevant. 10 Understandably, the submissions of each of the parties looked to a line of authority, for which McMahon v Gould (1982) 7 ACLR 202 (McMahon v Gould) is the Australian root authority and for which Jefferson Ltd v Bhetcha (1979) 1 WLR 898 might be said in turn to be the English root authority. However, as the submissions of the parties readily acknowledged, the present application is an inversion of factual circumstances which have given rise to those respective root authorities and also to cases such as Black & White Cab Co Pty Limited v Kelk (1984) 2 QR 484, Yuill v Spedley Securities Ltd (in liq) (1992) 8 ACSR 272 (Yuill v Spedley Securities), and Bannister v Director-General, Department of Corrective Services (2005) 1 QR 117 (Bannister v Director-General, Department of Corrective Services), where those authorities have fallen for consideration and application. 11 The reason for that is that in those cases the question which has arisen is the fate of a civil proceeding having regard to related contemporaneous criminal proceedings. Here, the question is an inverted one, that is, should the criminal contempt charge hearing be adjourned pending the hearing and determination of what is strictly a civil proceeding, albeit a civil penalty proceeding with related declaratory, injunctive and ancillary relief entailed. 12 Considerations relevant to the more usual type of adjournment application were summarised by Wootten J in McMahon v Gould at pages 206 to 207, in a way which has come, subject to one possible qualification, to be regarded as authoritative. The possible qualification arises from an observation made by Priestly JA in Yuill v Spedley Securities at page 275, with reference to guideline (a) of those set out by Wootten J, and the use of the words "prima face" in guideline. Priestly JA observed that: It seems to me to be plain from the context of the whole of the guidelines set out by his Honour that by "prima facie" as he used it there he meant substantially, "unless there is some reason for not doing so". Once the guidelines are read in that way they are in my respectful opinion irreproachable. 13 Regard to those guidelines and to observations made by Kirby P (as his Honour then was) in Yuill v Spedley Securities discloses that one considerations regarded as relevant in what I have termed the more usual factual situation is not pertinent here. That is, that the question of guilt or innocence in respect of the criminal contempt charge will be determined by a judge alone, whereas, in the criminal charges on indictment in the earlier cases, that fell to be determined by jury. There is an obvious question, which arose in those cases in terms of the potential effect on the integrity of a jury trial, having regard to publicity which might attend other proceedings. Here, that is not a consideration of particular moment, given that each of the criminal contempt charge proceeding and the civil penalty proceeding would fall for determination by a judicial officer alone. 14 Another factor which is a distinguishing feature is that the civil penalty proceeding entails not just the interests of persons who are affected by freezing orders made in those proceedings in respect of particular assets said to have been derived from conduct the subject of those proceedings, but also that there is a class of franchisees, or perhaps more strictly, former franchisees, who have a contingent interest in the outcome of those proceedings. 15 It is put on behalf of Mr Foster that those persons, ie those the subject of the freezing orders and the class of franchisees or former franchisees, as well as he and the others who are respondents to the civil penalty proceeding have an interest in its prompt hearing and determination. So much may be accepted. There is also, given the very nature of the civil penalty proceeding, ie that they are public rather than private proceedings initiated by an emanation of the Commonwealth, a public interest in their hearing and determination as soon as possible. 16 That though is not the only public interest which is at large today. It was submitted, and in my opinion correctly submitted, on behalf of the Commission that it may be a distinction without a difference that in the earlier authorities, the public interest has been in the expeditious administration of the criminal justice system, whereas, in respect of the criminal contempt charge which the Commission brings, the public interest is in the expeditious vindication of a question as to whether the orders of a court exercising the judicial power of the Commonwealth have been violated. There is an obvious public interest, so far as the rule of law is concerned, in the vindication of the authority of orders made in the exercise of Commonwealth judicial power. Such orders must not be regarded as mere aspirational statements. 17 Other factors which are pertinent have about them something of a contingent quality. It was put on behalf of Mr Foster that, were he to be convicted of the criminal contempt charge, he would be placed in a position of difficulty, so far as his defending the civil penalty proceeding was concerned. That difficulty was the practical one, so he submitted, in that he may be in prison as a result of any conviction in respect of criminal contempt and thereby have difficulty in terms of presenting or conducting a defence. 18 It was common ground that there is a likelihood, in the event that the criminal contempt charge is proved, that a conviction would in all likelihood entail the imposition of a custodial sentence. For all that, it is by no means impossible for the Court, when seized with the civil penalty proceeding, to make orders for Mr Foster's production as required so as to conduct his defence to the civil penalty proceeding, including, if need be, an order for their transfer to whichever State in which he may be imprisoned, if the interests of justice so require. As I have observed, that is something of a speculative issue. 19 The standard of proof in respect of the proceedings is different. A criminal contempt charge must be proved beyond reasonable doubt. The civil penalty proceeding, insofar as a penalty order is sought, must be proved on the balance of probabilities, albeit having regard to s 140 of the Evidence Act 1995 (Cth) and Briginshaw v Briginshaw (1938) 60 CLR 336, paying due regard to the gravity of the allegations made. 20 Another factor which falls for consideration is that, in respect of the criminal contempt charge, Mr Foster is under no obligation to make any evidentiary response whatsoever to the charge brought against him. He is entitled to put the Commission to proof, and to test its proofs without leading evidence himself, or without being called upon to give evidence himself. He is equally entitled, in respect of the civil penalty proceeding, not to give evidence. It was recognised in the submissions made on his behalf that a necessary consequence of the application if it were successful may be that Mr Foster, if he chose to give evidence civil penalty proceeding, would then be in the position of any such evidence being able to be used in respect of the criminal contempt charge. Whilst that was recognised, a court ought not lightly put a person faced with a criminal contempt charge in a position of having to make such a choice in respect of a separate but not unrelated civil penalty proceeding. It is the former, not the latter, that entails jeopardy of imprisonment, loss of liberty. 21 The case the closest to the present is Bannister v Director-General, Department of Corrective Services. I make that observation because in that case, the applicant corrective services officers had been committed for trial in respect of an alleged assault contrary to provisions in the Criminal Code Act 1899 (Qld). At the same time, they faced disciplinary proceedings under the Public Service Act 1996 (Qld). Those disciplinary proceedings against them arose out of the same incident the subject of the criminal charge of assault. It can be seen then that in that instance there were two proceedings of a public character which were entailed. The application in that case was for the restraint of the Director-General, who had brought the disciplinary proceedings, from the further prosecution of those proceedings pending the determination of the criminal proceedings. In the result, that application failed. 22 The question is one for the exercise of a discretion as to where the interests of justice lie. There is a balancing exercise as between particular public interests which I have identified. It would, in my opinion, take a very strong and singular situation indeed to warrant the adjournment of a criminal contempt charge, pending the disposition of a civil proceeding, even a civil penalty proceeding. Particularly, that would be so if a person were in custody pending the disposition of the criminal contempt proceeding. 23 Mr Foster is not in custody. He is released in accordance with the orders made on 9 December 2011. There is no suggestion whatsoever that he had in any way failed to comply with the terms of his release. For all that, the release was made against the background of an expectation that the criminal contempt charge would be heard as soon as possible. Such charges require expeditious disposition. There is a risk, and it is nothing more than that, that in the event that the civil penalty proceeding were to be determined against Mr Foster, that this may influence his attitude so far as compliance with the terms of his release are concerned. He may possibly form a view that, in effect, "the writing is on the wall". Given that the charge of contempt would have to be separately proved and proved beyond reasonable doubt, it by no means follows that proof of the civil penalty proceeding would in any way entail proof of the contempt charge. It is a separate proceeding. However, misconceived that view may be, it is just that, in the mind of a lay person, one result may present with it temptations or predictions as to outcome. 24 It would be quite wrong, although the prospect was canvassed, to base an adjournment of the criminal contempt charge on the basis that, were the civil penalty proceedings determined adversely against him, Mr Foster would then plead guilty to the criminal contempt charge. It would be wrong in principle to put Mr Foster in that position. 25 The end result, in my opinion, is that the public interest in the timely disposition of the criminal contempt charge is such that, giving due weight to other public interests which are at large, the application for the adjournment of the criminal contempt charge should be refused. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. Associate: Dated: 24 February 2012 SCHEDULE CHRONOLOGY Date Event 15.07.11 NSD 1163 of 2011: Proceedings commenced 18.07.11 NSD 1163 of 2011: Fisher Dore advises that have instructions to act for Mr Foster in 11.11.11 Contempt Charge filed and initial orders made by Jacobson J in this proceeding 22.11.11 Initial listing before Logan J at which time Mr Foster foreshadows an application for bail. Bail hearing set for 28 November, with preparatory orders made 28.11.2011 Bail hearing date varied, together with timetable for evidence. Bail hearing occurs 7 and 9 December 2011 05.12.11 NSD 1163 of 2011: Orders made by consent, for, inter alia, Respondents defences (if any) to be filed by 30 January 2012 09.12.11 Bail granted to Mr Foster. Directions made for preparation of the matter for hearing – following agreement and discussion between parties (T 69ff) 15.12.12 Mr Foster released on bail 13.12.11 Justice Dowsett's Associate indicates his Honour intends to list the matter for hearing 14-23 February 14.12.11 Fisher Dore indicates to Justice Dowsett's Associate difficulties in readiness for hearing between 14-23 February 21.12.11 Justice Dowsett's Associate advises that the matter will not be heard by Dowsett J on the expedited basis on 14-23 February, and will revert to the docket judge, Justice Collier for a date to be allocated 27.01.12 NSD 1163 of 2011: Mr Foster informs Associate to Justice Yates that Fisher Dore will cease acting for him and that he is acting for himself in NSD1163, and indicates he wishes to file a defence 31.01.12 Applicant enquires of Justice Collier's Associate seeking to have matter relisted for directions Associate advises matter will be listed for directions on 15 February 2012 02.02.12 Mr Foster informs Justice Collier's Associate of an intention to apply for an adjournment of the contempt proceedings until after the substantive proceedings are dealt with by Justice Yates 03.02.12 NSD 1163 of 2011: Applicant writes to Justice Yates Associate and other parties, asking matter to be relisted 03.02.12 Matter is transferred to Justice Logan's docket and procedural directions made for a directions and hearing on adjournment application on 9 February 2012 04.02.12 NSD 1163 of 2011: Applicant served with Fisher Dore's Notice of Ceasing to Act [sic]