Industrial Relations Commission of New South Wales in Court Session CITATION: Shields Family Trust and John Hardgrave and Others [2005] NSWIRComm 274 APPLICANT: Shields Family Trust RESPONDENTS: John Hardgrave Ian Brown Richardson & Wrench, Parkes Timothy Gow PARTIES: George Lee Coveny Hunters & Co Terrence George Alfred Arnold Karen Monahan Anca Ramsden James Kibble Gary Warnecke FILE NUMBER(S): IRC 1134 of 2005 CORAM: Walton J Vice-President; Schmidt J; Boland J Contempt - contempt alleged in proceedings commenced under section 84 of the Industrial Relations Act 1996 - alleged contempt arising from failure to comply with summonses for production of documents by third parties - inadequate service - no documents to be produced - documents already in possession of applicant - responses to summonses put on - proceedings discontinued - no hearing - contempt not found CATCHWORDS: Costs - indemnity costs sought - refused - costs to follow the event - applicant ordered to meet respondents' costs as agreed or assessed Industrial Relations Act 1996 Industrial Relations Commission Rules Industrial Relations (General) Regulation 2001 LEGISLATION CITED: Service and Execution of Process Act 1992 Supreme Court Rules 1970 HEARING DATES: 05/23/2005; 06/23/2005 DATE OF JUDGMENT: 08/05/2005 APPLICANT: Mr H Karimjee, solicitor Shields Family Trust LEGAL REPRESENTATIVES: RESPONDENTS: Mr M Lawson of counsel for Messrs Hardgrave, Brown, Gow, Coveny, Monahan, Ramsden, Kibble, George and Arnold Mr S Legzdin for Hunter & Co Mr Giurissevich, solicitor for Mr Gary Warnecke JUDGMENT: - 10 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION FULL BENCH CORAM: Walton J, Vice President Schmidt J Boland J 5 August 2005 Matter No IRC 1134 of 2005 SHIELDS FAMILY TRUST AND JOHN HARDGRAVE AND OTHERS Application by Shields Family Trust re allegation of contempt by John Hardgrave and others in respect of summons to produce issued on 20 January 2005 in unfair dismissal application IRC 6494 of 2004 JUDGMENT OF THE COURT [2005] NSWIRComm 274 1 These contempt proceedings were commenced in March 2005. They arose out of proceedings commenced under s 84 of the Industrial Relations Act 1996 ('the Act'). The alleged contempt was said to have arisen from the failure of various third parties to the s 84 proceedings, (the respondents to these proceedings), to comply with summonses for the production of documents issued in the s 84 proceedings by the applicant. 2 This judgment deals with the question of costs, these proceedings otherwise having been discontinued. Various of the respondents seek indemnity costs orders against the applicant and/or the applicant's solicitors. 3 These proceedings were discontinued against the various respondents, following upon the filing of affidavits confirming that they had no documents to produce in answer to the summonses in question, or the production of documents, said already to have been in the possession of the applicant. 4 The application for indemnity costs was pressed on the basis that in the s 84 proceedings, there had never been service of the summonses for production on which the applicant relied in these proceedings in accordance with the requirements of the Commission's Rules; accordingly, any application for contempt was always bound to fail. The respondents, nevertheless, had put on evidence that they had no documents to produce in response to the summonses or had produced documents which the applicant already had. The applicant asserted that the respondents must be hiding documents, but no evidence had ever been brought to support that assertion. In any event, the notices of motion commencing these contempt proceedings themselves had never been served upon the respondents in accordance with the Rules. Given the gravity of the proceedings, the respondents were consequently entitled to do absolutely nothing in relation to the application. They had, nevertheless, responded, appeared before the Court and participated, so as to bring the proceedings to an end by discontinuance. They had incurred costs as a result and were therefore entitled to an indemnity costs order. 5 The applicant's case was that while the Rules required personal service of both the summonses for production in the s 84 proceedings and the motion initiating these proceedings, the respondents' appearances cured any defect in service. It followed that costs should be 'in the cause'. If the contempt proceedings had not been commenced, the applicant would not have received the information and documents which the contempt proceedings had produced. If the applicant's suspicions that the respondents were withholding documents was proven in the unfair dismissal proceedings, then the applicant would have been shown to have been justified in the actions here taken. 6 By virtue of Rule 89, supplementary practice, of the Commission's Rules, reliance was placed upon Rules 9.2 and 37.12 of the Supreme Court Rules 1970 which provide: 9.2 Originating process (1) Subject to any Act, originating process shall be served personally on each defendant. (2) The copy for service shall be signed and sealed as mentioned in Part 7 rule 6. cf RSC (Rev) 1965, O 10, r 1 (1); O 15, r 3 (5); O 16, r 3 (4). (3) Where a defendant to any originating process files a notice of appearance, the originating process shall be taken to have been served on him personally on the date on which his notice of appearance is filed or on such earlier date as may be proved. cf RSC (Rev) 1965, O 10, r 1 (3). 37.12 Failure to comply with subpoena—contempt of court (1) Failure to comply with a subpoena without lawful excuse is a contempt of court and the addressee may be dealt with accordingly. (2) Despite rule 5 (1), if a subpoena has not been served personally on the addressee, the addressee may be dealt with for contempt of court as if the addressee had been so served if it is proved that the addressee had, by the last date for service of the subpoena, actual knowledge of the subpoena and of its requirements. (3) Subrules (1) and (2) are without prejudice to any power of the Court under any rules of the Court (including any rules of the Court providing for the arrest of an addressee who defaults in attendance in accordance with a subpoena) or otherwise, to enforce compliance with a subpoena. 7 It was also argued that the respondents ought to have responded to the summonses in the s 84 proceedings, or applied by motion to have them varied or set aside. Their conduct should not now entitle them to any costs order, particularly given that a timely response in the contempt proceedings, would have avoided some, at least, of the costs at issue. It was submitted that costs should await the outcome of the unfair dismissal proceedings. Consideration 8 In proceedings brought under s 84 of the Act, a party is entitled to have a summons for the production of documents issued to third parties such as the respondents. Such a summons requires production to the Commission, not to the party which has requested that the summons be issued. The Supreme Court Rule relied upon by the applicant does not apply to such a summons. Rules 91 to 94 of the Commission's Rules apply. They provide: 91 Summonses (1) On the request by a party, the Registrar must, if authorised by the Act and unless the tribunal otherwise orders, issue a summons for production or to give evidence. (2) A summons to confer may only be issued on the initiative of the Commission, the Presidential Member of the Contract of Carriage Tribunal or the Chairperson of an Industrial Committee. (3) Any number of persons may be included in one summons, but the copy served need only contain the name of the person upon whom it is served. (4) A party requesting the issue of a summons must produce a form of summons and file a copy thereof. 92 Conduct money (1) Where a summons for production or to give evidence is issued at the request of a party, the person named is to be tendered, at the time of service of the summons or not later than a reasonable time before the day on which compliance is required by the summons, a sum required by the Industrial Relations (General) Regulation 1996. (2) The person named is not required to attend on any day on which attendance is required unless that sum is paid or tendered at the relevant time. (3) This Rule does not apply to a summons to confer. 93 Service of summons (1) Service of a summons, other than a summons to confer, under this Part must be effected in accordance with this Part unless a tribunal or the Registrar otherwise directs. (2) Service of a summons may be effected by handing the summons or a copy of the summons to the person named. (3) If, on tender of the summons to the person named, the person refuses to accept it, the summons may be served by putting it down in the presence of that person after the nature of the summons has been explained. (4) Where the person named in the summons is a party for whom a solicitor or an agent is specified in the proceedings, the summons may, with the consent of the solicitor or agent, be served on the person named by leaving it at the address for service. (5) Service of a summons on a corporation may be effected by serving the summons in accordance with subrule (2) or (3), as the case may require, on the mayor, chairperson or president, or on the general manager, clerk, secretary, treasurer, principal officer or other similar officer of the corporation or, where provision is made by or under any Act for service of a document on a corporation, by serving the summons in accordance with that provision. (6) Service of a summons on any State peak council or any organisation or association registered under the Act may be effected by serving the summons in accordance with subrule (2) or (3), as the case may require, on the president, principal officer, secretary, treasurer or other similar officer of the organisation or by serving the summons in accordance with Rule 106. (7) A summons issued at the request of a party may not be served on the person named later than 5 days before the date the person is required to attend, unless the tribunal otherwise orders. (8) An order for short service may be made at any time. (9) An order for short service may be sought by filing notice of motion, indicating why an order for short service should be made. (10) An application may, unless the tribunal orders otherwise, be dealt with in chambers without the appearance of any person. (11) A copy of any order for short service must be served with the summons. 94 Setting aside of summons (1) A tribunal may on application by the person named in the summons set aside wholly or in part a summons issued at the request of a party. (2) An application under subrule (1) must be made by notice of motion or, with leave of the tribunal, orally in the course of proceedings. (3) An application under subrule, if made by notice of motion, must be served on the party on whose request the summons was issued. 9 The Industrial Relations (General) Regulation 2001 provides: 20 Expenses of persons summonsed (1) This clause applies to any summons (however described) for the purposes of the Act that is issued at the request of a party and requires a person to do either or both of the following: (a) attend and give evidence, (b) attend and produce documents or other things. (2) Any such person is not required to comply with the summons unless an amount sufficient to meet the reasonable expenses of the person in complying with the summons is paid or tendered to the person at the time of service of the summons or not later than a reasonable time before the day on which the person is required to comply with the summons. (3) If the person required to comply with the summons is not a party and, in order to comply with the summons, incurs expense or loss substantially exceeding any amount paid under subclause (2), the Commission may order the party who requested the issue of the summons to pay to the person an amount sufficient to make good the expense or loss. 10 There is no issue between the parties that none of the summonses for production of documents here at issue, were served personally upon the respondents, as required by the Commission's Rules. The summonses in question were posted on 2 February, with a post office money order for $20. Production was required by 10 February. 11 In the case of one of the respondents, who lives in Hong Kong, service was effected at an Australian postal address. In other cases, service was effected interstate. Rules 111 and 112 of the Commission's Rules provide: 111 Service out of the State but within Australia (1) This Rule applies where any process or document is to be served outside the State but within Australia. (2) Process in proceedings before a tribunal may be served in accordance with the provisions of the Service and Execution of Process Act 1992. (3) Process and documents before the Commission may also be served in accordance with such directions as the Commission may give when requiring such service under section 162. (4) Where process served under this Rule requires or permits the filing of a notice of appearance, the period for entry of such an appearance will be 21 days after service, unless the tribunal, on application allows a shorter period. 112 Service out of Australia (1) This Rule applies where, pursuant to section 162 (2) (f) or otherwise, any process or document is to be served outside the State and outside Australia. (2) Process or documents may be served outside Australia, but must bear a note in the appropriate form. (3) Where process served under this Rule requires or permits the filing of a notice of appearance, the period for entry of such an appearance will be 21 days after service, unless the tribunal, on application allows a shorter period. (4) Where there is no appearance by the defendant or respondent to any process served under this Rule, the applicant must not proceed except by leave of the tribunal before which the proceedings are brought. 12 The time fixed for service of subpoenas under s 30 of the Service and Execution of Process Act 1992, is not less than 14 days before the subpoenas must be complied with, unless the Commission permits a shorter period (s 30). In those cases where the respondents resided within the State, service was required to be effected 5 days before the date upon which production was required. 13 The summonses came before the Registrar and were stood over on several occasions, before these proceedings were instituted. There was no suggestion that despite the problems as to service, any respondent did not have actual knowledge of the summons. Various steps were taken by the respondents to respond to the summons which it is unnecessary to outline. The applicant regarded each response as inadequate, but never required any respondent to appear for cross-examination as to the response, or lack of response, to the summons. 14 It is in this context that it can be seen that these contempt proceedings were instituted prematurely, if available to be taken at all, in the case of any individual respondent. If the service of the summonses is regarded as being adequate, in any particular case, given that the respondents each became aware of the summons, even though not served personally, or as otherwise required, so as to have required a response to the Commission, contempt could only arise if there is a successful challenge to the respondents' assertions, that there are no documents, or no other documents, to produce in response to the summons. (See Rule 31.12 of the Supreme Court Rules earlier referred to). 15 The summonses followed earlier summonses seeking production of similar documents. These proceedings were discontinued upon the filing of affidavits confirming advice given in various ways, that the respondents did not have the documents sought, or by production of documents said already to be in the possession of the applicant. The correctness of these assertions has been left to be tested, if necessary, in the unfair dismissal proceedings - where that issue could always have been tested, in the usual way. The process is conveniently described in Ritchie's Supreme Court Practice at 37.0.2: Sufficiency of answer A party calling on a person subpoenaed to produce documents may be entitled to test the sufficiency of the answer to the subpoena or the basis for any objection to production or inspection of the documents. For that purpose the person answering the subpoena may be required to be sworn and examined. However when this occurs the person answering the subpoena does not thereby become a witness in the cause and is not liable to general cross-examination by the opposing party - although cross-examination may be permitted in relation to evidence about the sufficiency of the answer to the subpoena: Trade Practices Commission v Arnotts Ltd (No 2) (1989) 21 FCR 306; 88 ALR 90. Disobedience to a subpoena cannot be dealt with unless the document is proved to exist and to have been in possession and control of the witness at the material time: O'Born v Cmr for Government Transport (1959) 77 WN (NSW) 81; Ditfort v Brown (1990) 19 NSWLR 49. 16 A person may, of course, be required to attend the Commission for the purpose of such cross-examination as to the sufficiency of any production in response to a summons issued by the Commission. 17 To these difficulties must be added the applicant's failure to serve the process initiating the contempt proceedings themselves, in accordance with the requirements of the Commission's Rules. Rule 235, requires that: The notice of motion or application, the statement of charge and the affidavits must be served personally on the offender. 18 True it is that the respondents, nevertheless, appeared in these proceedings, with the result that they were eventually discontinued. The position remains that the process originating these proceedings was never properly served; the respondents, nevertheless, did appear and participated in the proceedings, with the result that the proceedings were later discontinued, without hearing or a finding of contempt. 19 It is just in those circumstances, that costs follow the event in the usual way, with an order in favour of the respondents. To suggest that costs should be 'in the cause' overlooks that fundamentally, the cause here before the Court is the contempt proceedings, not the proceedings brought under s 84 of the Act, to which the respondents are not parties. Even in those proceedings, a person such as the applicant, who issues a summons for production of documents to third parties such as the respondents, is bound to meet their costs in answering the summons, as the Regulation earlier referred to makes clear. That is an obligation which arises in circumstances where, in the usual case, the parties to the s 84 proceedings must themselves meet the costs they incur in the proceedings. (See s 181(2) of the Industrial Relations Act 1996.) 20 The circumstances in which an order for indemnity costs may be made are well settled. We are not satisfied that the circumstances here are such that an indemnity costs order may properly be made. We have accepted that there were problems associated with service. Nevertheless, as we have earlier observed, in each case service was sufficient to have brought the summons to the attention of the respondent. A response to the Commission, in accordance with the obligations flowing from the summonses in the s 84 proceedings was required. These proceedings were discontinued because responses to the summonses were properly put on and the contest as to the adequacy of those responses was left to be tested in the proceedings before the Commission, in the ordinary way, if that be necessary. Orders 21 For all of the reasons given, we order the applicant Gail Shields, as trustee for Shields Family Trust, to meet the following respondents' costs of these proceedings, as agreed or assessed: John Hardgrave Ian Brown Timothy Gow George Lee Coveny Hunters & Co Karen Monahan Anca Ramsden James Kibble Gary Warnecke ------------------------ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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