Reported Decision : 165 LGERA 329 Land and Environment Court of New South Wales CITATION : Arnold v Minister Administering the Water Management Act 2000 (No 3) [2009] NSWLEC 56 This decision has been amended. Please see the end of the judgment for a list of the amendments. APPLICANTS: Alan Arnold & Ors FIRST RESPONDENT: Minister Administering the Water Management Act 2000 PARTIES : SECOND RESPONDENT: The State of New South Wales THIRD RESPONDENT: The Commonwealth of Australia FILE NUMBER(S) : 40049 of 2007 CORAM: Biscoe J KEY ISSUES: CONTEMPT :- whether Commonwealth of Australia immune from contempt proceedings - distinction between civil and criminal contempt - alleged contempt by threatening not to make an ex gratia payment to persons if the persons continued legal proceedings against Commonwealth - whether the person alleged to have made the threat was an authorised agent or delegate of the Commonwealth - whether letter written by solicitor for the Commonwealth proved contempt by the Commonwealth. Civil Procedure Act 2005, ss 130, 131, 133 Crown Proceedings Act 1980 (Qld), ss 7, 9, 10 Judiciary Act 1903 (Cth), ss 2, 56, 64 and 79 Land and Environment Court Rules 2007, r 4.5 National Resources Management (Financial Assistance) Act 2004 (Cth) LEGISLATION CITED: National Water Commission Act 1992 (Cth) Supreme Court Act 1970, s 101 Supreme Court Rules 1970, Pt 42, 55 Uniform Civil Procedure Rules 2005, Pt 40 Division 2 Water Act 1912, Pt 5 Water Management Act 2000, Pt 2 of Ch 3 Water Sharing Plan for the Lower Murray Groundwater Source 2006 Arnold and Others v Minister Administering Water Management Act 2000 and Others [2007] NSWLEC 531, (2007) 157 LGERA 379 Arnold and Others v Minister Administering Water Management Act 2000 and Others [2008] NSWCA 338, (2008) 163 LGERA 429 Attorney-General v Newspaper Publishing PLC [1988] Ch 333 Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 Bropho v Western Australia (1990) 171 CLR 1 Commonwealth v Mewett (1996-1997) 191 CLR 471 Crowther v State of Queensland [2006] QCA 308, [2007] 1 Qd R 232, (2006) 148 LGERA 220 CASES CITED: Harkianakis v Skalkos (1997) 42 NSWLR 22 Hearne v Street [2008] HCA 36, (2008) 235 CLR 125 Home Office v Harman [1983] 1 AC 280 In re M [1993] UKHL 5, [1994] 1 AC 377 North Australian Aboriginal Legal Aid Service Inc v Bradley (2001) 188 ALR 312 Street v Hearne [2007] NSWCA 113, (2007) 70 NSWLR 231 Witham v Holloway [1995] HCA 3, (1995) 183 CLR 525 Y & Z v W [2007] NSWCA 329, (2007), 70 NSWLR 377 Arlidge, Eady and Smith on Contempt, 3rd ed (2005) TEXTS CITED: Halsbury's Laws of Australia, vol 5 at 188 Hogg and Monahan, Liability of the Crown, 3rd ed (2000) 313-316 DATES OF HEARING: 7 and 9 April 2009 DATE OF JUDGMENT: 27 April 2009 APPLICANTS: Mr P King SOLICITORS Taylor & Whitty LEGAL REPRESENTATIVES: RESPONDENTS: Ms M Nagy SOLICITORS Australian Government Solicitor JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES BISCOE J 27 April 2009 40049 of 2007 ALAN ARNOLD & ORS v MINISTER ADMINISTERING THE WATER MANAGEMENT ACT 2000 & ORS JUDGMENT 1 HIS HONOUR: This case raises the question whether the Commonwealth of Australia is immune from contempt of court proceedings. It appears to have been the first case in which the Commonwealth has been charged with contempt. 2 The applicants move for an order that the third respondent, the Commonwealth, "is in Contempt of Court insofar as it, its servants and/or agents or delegates have threatened, the Applicants in these proceedings." The statement of charge which then appears in the applicants' notice of motion states: "(a) In late July and early August 2007 the Third Respondent, by its authorized agent or delegate, Mr Gary Coady, for the purposes of the ASGE Program, threatened the Applicant Mr Michael Taylor, in that he stated that should Mr Taylor continue as a party to the proceedings in the Land & Environment Court, that the Third Respondent would prevent or cease any payment to Mr Taylor under the ASGE Program. (b) To all applicants by the letter of the Australian Government Solicitor dated 25 July 2007." 3 The notice of motion prays that the Court make such orders as it deems fit "as to the purging of the contempt" by the Commonwealth and such other orders as the Court deems fit. The applicants' written submissions seek the following more specific order: "The Court should order that the Third Respondent take all steps available to it [to] pay the Applicants all ASGE adjustment payments withheld from them by reason of them having commenced the proceedings against the Respondents within 21 days of the Court's Judgment, and reserve liberty to apply in the event that no such payments are made, including for the making of a payment or bond, or to suspend any fine upon satisfaction of the specific condition of observance." 4 Thus, the applicants seek an order that the Commonwealth pay them money under the Achieving Sustainable Groundwater Entitlements (ASGE) program, which is a governmental program for making ex gratia payments to groundwater licence holders to assist them to adjust to changes to their licences required under the ASGE program. 5 The Commonwealth did not dispute that the charge, if proved, was capable of constituting contempt. 6 In my opinion, the charge should be dismissed for three reasons: (a) these are proceedings for criminal contempt from which the Commonwealth is immune; (b) it has not been proved that Mr Gary Coady was an authorised agent or delegate of the Commonwealth; and (c) the letter dated 25 July 2007 from the Commonwealth's solicitor, the Australian Government Solicitor ( AGS ) to the Applicants' solicitor, does not prove contempt by the Commonwealth. 7 The background, the evidence relating to the contempt charge, and my reasons are as follows. Background 8 The numerous applicants are farmers who held groundwater extraction entitlements in the Lower Murray region under Pt 5 of the Water Act 1912 (NSW). Pursuant to Pt 2 of Ch 3 of the Water Management Act 2000 (NSW) , as and from 1 November 2006, such entitlements were replaced by aquifer access licences and supplementary water licences. As a result of these measures, and pursuant to regulations made under the Water Management Act 2000 entitled Water Sharing Plan for the Lower Murray Groundwater Source 2006, the applicants' entitlements to extract groundwater have been significantly reduced. 9 The applicants commenced proceedings in the Land and Environment Court challenging the validity of the legislative scheme and the 2006 Plan. The respondents to the proceedings are the NSW Minister Administering the Water Management Act 2000, the State of New South Wales and the Commonwealth. The relief sought included declarations that the 2006 Plan is invalid, that the National Water Commission Act 2004(Cth) and the Natural Resources Management (Financial Assistance) Act 2004 (Cth) are, relevantly, unconstitutional, as well as quashing orders, injunctions and damages. 10 The Commonwealth moved successfully for a stay of the proceedings against it: Arnold v Minister Administering Water Management Act 2000 [2007] NSWLEC 531, (2007) 157 LGERA 379. Costs were reserved. An appeal was dismissed with costs: Arnold and Others v Minister Administering Water Management Act 2000 and Others [2008] NSWCA 338, (2008) 163 LGERA 429. Evidence on the contempt charges 11 On the contempt charges, the Commonwealth tendered no evidence and did not challenge the applicants' evidence, which I accept. 12 On 21 December 2005 one of the applicants, Mr Michael Taylor, received a NSW Department of Natural Resources document entitled "Achieving Sustainable Groundwater Entitlements Program", which included the following: " ASGE program financial assistance The NSW and Australian governments recognise that changes are required to groundwater licences under the Achieving Sustainable Groundwater Entitlements (ASGE) program. Financial assistance of $110 million from the NSW and Australian governments has been made available to assist licence holders and communities adjust to these changes. The financial assistance has been divided into two main sections: * financial assistance for licence holders of up to $100 million * a Community Development Fund of up to $9 million to help strengthen communities; and up to $1 million for the implementation of the ASGE program including the costs for completing valuations and consultation. Financial assistance to licence holders The Valuer General has determined the value of groundwater for each of the six major inland groundwater systems. A separate valuation has been made for the active (extracted), inactive (sleeper) and tradeable components of groundwater. Financial assistance for eligible licence-holders will be paid in the first year of the water sharing plan as an ex gratia payment. Financial assistance is available for licence holders according to three components, as follows. … Financial assistance for the community Both the NSW and Australian governments recognise the impact of this program will be felt not only by individual licence holders but by local communities as a whole. … What happens next? After the consultation process is complete, you will be contacted by the Department of Natural Resources, around mid-2006, about your new water access arrangements and any financial assistance you may be eligible for." 13 A letter dated 18 August 2006 from the NSW Department of Natural Resources to Mr Taylor included the following: "I am writing to advise you of the groundwater allocation for the property account 50PT940220 for the 2006/07 water year. I will also take the opportunity to provide you with an update on recent progress of the Achieving Sustainable Groundwater Entitlements (ASGE) program and the commencement of the Lower Murray groundwater sharing plan. The ASGE program has been developed by the New South Wales and Australian governments in partnership with irrigators, with consultation facilitated by catchment management authorities (CMAs). The program aims to ensure the long term sustainability of the six major inland groundwater systems in New South Wales and a healthy and sustainable groundwater irrigation industry. The NSW and Australian Governments have jointly invested $110 million in the program to support water users and regional communities. Following consultations facilitated by the Murray CMA, the method for entitlement reductions and distribution of financial assistance has been approved by both the NSW and Australian governments… … I appreciate that there has been a considerable period of uncertainty for licence holders. The Department of Natural Resources is committed to gazettal and implementation of the Water Sharing Plan for the Lower Murray Groundwater Source and the issue of water access licences so eligible licence holders may receive financial assistance as soon as feasible and can plan ahead with security and certainty. If you have any queries or would like more information on the allocation for the property entitlement, licence, or potential financial assistance, you are welcome to call Digby Jacobs at the Deniliquin office on 03 5898 3900. More information on water management plans and the ASGE program is available on the website or by phoning 1800 353 104." 14 Mr Taylor formed the belief, partly based on this letter, that he was entitled to about $187,000. 15 Enclosed with the last-mentioned letter was a NSW Department of Natural Resources document entitled "2006/07 Groundwater Allocation Lower Murray Groundwater Sharing Plan and Achieving Sustainable Groundwater Entitlements Program Update". It included the following: "When the water sharing plan commences the Water Act 1912 property accounts will be converted to aquifer access licences and supplementary water access licences." 16 On 12 July 2007, after these proceedings had commenced, the applicants' solicitors, Taylor and Whitty, wrote to the Commonwealth's solicitor, the AGS, stating relevantly: "Second after the commencement of these proceedings and the joinder of your client your client publicly announced further funding to be made available to irrigators in New South Wales under the impugned programme, but in so doing let it be known through media outlets that the present Applicants may miss out or have delayed any payment to them of the additional moneys to which they are entitled and which we should add is still insufficient to be just compensation for the confiscation of their property. This threat or implied threat we consider to be disgraceful conduct of or in relation to this matter, especially in the light of the delays and obfuscation involved in your client's conduct of the matter, and we reserve our right to claim exemplary damages in the case in due course. We also propose to prove this conduct as an admission in the circumstances of this case of the rights of our clients against your client." 17 On 25 July 2007 the AGS wrote a letter of reply, which is referred to in the statement of charge in the applicants' notice of motion. It stated relevantly: "Firstly, we are not aware of the media statements to which you refer. Secondly, the decision to withhold payments from licence holders pursuing legal action was based on a unanimous recommendation from the Groundwater Adjustment Advisory Committee – which is comprised of two NSW Government officials, two Commonwealth Government officials, two members from the NSW Irrigators Council and the chairs from the NSW Catchment Management Authorities. The decision was not taken lightly and is certainly not a threat from the Commonwealth of Australia (the Commonwealth)." 18 Evidence of the conversation between one of the applicants, Mr Michael Taylor and a Mr Gary Coady, which is also referred to in the statement of charge, appears in an affidavit of Mr Taylor, which included the following: "1. I am an applicant in these proceedings I am [a] farmer and reside on the farming property on the Deniliquin-Tocumwal Road Tocumwal (the "farm")… 2. The farm is owned in the name of my 8 siblings and I. 3. The farm is about 2,500 acres and is set up with supply banks and channels for broad acre irrigation (rice and lucerne in the summer months and canola, wheat and other cereals in the winter). Some land is utilised for stock. ... 12. In July 2007 I went on holidays. After my return, on a date I believe to be 17 July 2007 it occurred to me that I should call the Department of Natural Resources to find out when the assistance money would be paid. We needed the money quite urgently as the reductions to our water pursuant to the Water Sharing Plan had reduced our capacity to earn money on the farm. 13. I called the Department of Natural Resources Deniliquin Office. I cannot recall the name of the person who answered. I introduced myself and said: I said: `When are we getting our Assistance Package Monies' They said `I don't know, that is something you will have to speak to the project manager about. His name is Gary Coady. This is his number' I called the number and a person who introduced himself as Gary Coady answered. I said: `My name is Mick Taylor form Finley, can you tell me when the assistance money will be paid'. He said: `Are you part of the Court proceedings in the Murray' I said: `Yes' He said: `There will be no payments to license holders because of the class action' 14. I was informed in early August 2007 that the amount of money available as assistance under the ASGE program was being suddenly increased. I wanted to know how much my assistance would increase. I decided to call Gary Coady direct as I had retained his phone number. I called the number of 6 August 2007 I believed to be his and a person answered identifying themself as Gary Coady. I said: `Can you tell me when the assistance packages will be paid and what my package including the new $25 million will be' He said: `What is your property account number and I can look it up for you' I gave him the numbers I refer to in paragraph 7 & 8. He said: `Your assistance package will be about $280,000.00' I said: `Do you know when it will be paid' He said: `In 2 to 4 weeks' He said: `Sorry, my records indicate your are part of the class action is that right?' I said: `Yes, but that shouldn't make a difference should it?' He said: `No that is not right, none of the litigants will be paid until after the class action is finalised' I said: `I thought there were no strings attached?' He said: `Because of the civil action, the Government has decided to hold the payments, and its not something they have to do anyway so the $280,000 is not a given, they may just decide not to pay it at all because of the civil action.'" 19 On 13 March 2008 the applicants' solicitors wrote to the AGS stating: "You have asked what our clients seek from your client in this matter. Prior to the next direction hearing we seek an undertaking that your client will withdraw any threat to not make, or delay payment under the ASGE program to the Applicants in the present matter before the Court. Further that your client will take all appropriate steps, to ensure its ASGE partner (the NSW Government) adopt the same approach by requiring any ASGE payment by NSW Government be made on the same basis. Please be advised we shall tender this letter to the Court in support of the Application for Contempt if your client refuses to provide the undertaking." Is the Commonwealth immune from contempt proceedings? 20 At common law, on the imperfect theory that the Sovereign can do no wrong and is assumed never to authorise a breach of the law, the Crown is immune from criminal proceedings: Hogg and Monahan, Liability of the Crown, 3rd ed (2000), 313-316. 21 Although the common law may be modified by statute, there is a "presumption that the general words of a statute do not bind the Crown or its instrumentalities or agents": Bropho v Western Australia (1990) 171 CLR 1 at 22. The strength of that presumption "will depend upon the circumstances…If, for example, the question in issue is whether the general words of a statute should be construed in a way which would make the Sovereign herself or himself in right of the Commonwealth or of a State liable to prosecution and conviction for a criminal offence, the presumption against a legislative intent to that effect would be extraordinarily strong": Bropho at 23. 22 The textbook writers and the authorities are united that the Crown itself is immune from at least criminal proceedings for contempt, but that Ministers, departments, officers and agents of the Crown are not. The immunity of the Crown from civil proceedings for contempt may or may not be another matter. 23 Hogg and Monahan, Liability of the Crown, 3rd ed (2000), says at 58 – 59 (omitting citations): "Contempt has never been available against the Crown itself. Indeed, in origin, disobedience of a court order was punishable on the ground that it was contemptuous of the King's authority. It was therefore impossible for the King himself to be in contempt. It was also unthinkable that the Courts could imprison or fine the King. In fact, the Courts never permitted the question to be raised, because the Courts refused to issue the orders of mandamus, injunction, specific performance or discovery, or the writs of execution or attachment, against the Crown." 24 Halsbury's Laws of Australia, vol 5 at 188, 209 par [105-280] states (omitting citations): "At common law, the Crown is not subject to the contempt jurisdiction of courts, although it is under a duty to comply with orders of the court. The common law immunity may be removed by statute." 25 Arlidge, Eady and Smith on Contempt, 3rd ed (2005), at par 2-222 state (omitting citations): "The Crown cannot be guilty of contempt, any more than it can be said to be guilty of a criminal offence. Some individual officers or representatives of the state, including police officers, and in particular officers of government departments such as the Inland Revenue, are nevertheless susceptible to the coercive and punitive disciplines of the law of contempt." 26 The leading English case on Crown immunity from contempt is In re M [1993] UKHL 5, [1994] 1 AC 377. The House of Lords held that the Secretary of the State was in contempt for failing to comply with an interlocutory order, made in judicial review proceedings, to return a foreigner to the United Kingdom following his deportation after an unsuccessful attempt to seek political asylum. The Secretary of the State contended that neither the Crown, nor a department of state, nor a Minister of the Crown acting in that capacity were answerable to proceedings in contempt. The House of Lords held that although a finding of contempt could not be made against the Crown as such, it could be made against a government department or a Minister of the Crown in his official capacity. The leading speech was delivered by Lord Woolf who held, at 424-425: "The Court of Appeal were of the opinion that a finding of contempt could not be made against the Crown, a government department or a minister of the Crown in his official capacity. Although it is to be expected that it will be rare indeed that the circumstances will exist in which such a finding would be justified, I do not believe there is any impediment to a court making such a finding, when it is appropriate to do so, not against the Crown directly, but against a government department or a minister of the Crown in his official capacity… Nolan L.J., at p. 311, considered that the fact that proceedings for contempt are "essentially personal and punitive" meant that it was not open to a court, as a matter of law, to make a finding of contempt against the Home Office or the Home Secretary. While contempt proceedings usually have these characteristics and contempt proceedings against a government department or a minister in an official capacity would not be either personal or punitive (it would clearly not be appropriate to fine or sequestrate the assets of the Crown or a government department or an officer of the Crown acting in his official capacity), this does not mean that a finding of contempt against a government department or minister would be pointless. The very fact of making such a finding would vindicate the requirements of justice. In addition an order for costs could be made to underline the significance of a contempt. A purpose of the courts' powers to make findings of contempt is to ensure that the orders of the court are obeyed. This jurisdiction is required to be coextensive with the courts' jurisdiction to make the orders which need the protection which the jurisdiction to make findings of contempt provides. In civil proceedings the court can now make orders (other than injunctions or for specific performance) against authorised government departments or the Attorney-General. On applications for judicial review orders can be made against ministers. In consequence of the developments identified already such orders must be taken not to offend the theory that the Crown can supposedly do no wrong. Equally, if such orders are made and not obeyed, the body against whom the orders were made can be found guilty of contempt without offending that theory, which would be the only justifiable impediment against making a finding of contempt." 27 The leading Australian case is Crowther v State of Queensland [2006] QCA 308, [2007] 1 Qd R 232, (2006) 148 LGERA 220 where the Queensland Court of Appeal held that the State of Queensland could not be prosecuted for contempt of Court for breaching an order of the Planning and Environment Court made in civil proceedings. As authority, the Court of Appeal at [7] quoted with approval from Hogg, Liability of the Crown, In re M and Halsbury's Laws of Australia (from which I have quoted). The Court of Appeal held that this principle had not been displaced by s 9(2) and (3) and s 10 of the Crown Proceedings Act 1980 (Qld) which provided: "9(2) In a proceeding by or against the Crown – (a) the rights of parties including rights of appeal shall as nearly as possible be the same; and (b) judgment may be given and costs awarded; as in a proceeding between subject and subject. (3) To remove any doubt, it is declared that this section does not require the Crown to comply with a provision (other than a procedural provision) of an Act or law that does not otherwise bind the Crown." "10 Nature of relief In a proceeding by or against the Crown, the court shall, subject to this Act, have power to give all such judgment as it has power to give in proceedings between subject and subject and otherwise to give such appropriate relief as a particular case requires." The term "proceeding" is defined in s 7 of that Act to mean "any action, suit or proceeding of a civil nature". 28 The Court of Appeal accepted that that this legislation exposed the Crown to liability in civil proceedings but not criminal proceedings. The Court concluded, however, that all contempt proceedings are essentially criminal in nature. De Jersey CJ (Jerrard JA agreeing) said, at [14]: "In Hinch v Attorney-General (Vict) (1987) 164 CLR 15, 49, Deane J said that `[p]roceedings seeking the imposition of ... punishment upon an alleged contemnor (or an order for sequestration in the case of a company) must realistically be seen as essentially criminal in nature ...'. Subsequently in Witham v Holloway (1995) 183 CLR 525, 534, Brennan, Deane, Toohey and Gaudron JJ endorsed that observation, saying that all proceedings for contempt `must realistically be seen as criminal in nature'. One may add reference to Hafele Australia Pty Ltd & Anor v Maggbury Pty Ltd & Anor [2000] QCA 397, where with the agreement of the other members of the Court, Muir J said: `Proceedings for contempt are criminal in nature and contempt charges must be proved beyond reasonable doubt.' (para [29])'" 29 McMurdo P held at [27] - [29] (citations omitted): "…I am prepared to accept for the purposes of the applicant's present argument that the original proceedings against the respondent in the Planning and Environment Court under the EPA, in light of the concessions there made by counsel for the respondent, were civil proceedings to which s 9(2) of the Act applied. The central issue is then whether the applicant's proceedings against the respondent for contempt were an `action, suit or proceeding of a civil nature' so that s 9(2) of the Act applies to alter the position at common law. In Witham v Holloway Brennan, Deane, Toohey and Gaudron JJ referred with approval to the comments of Deane J in Hinch v Attorney-General (Vict) and noted that all proceedings for contempt must realistically be seen as criminal in nature so that all charges of contempt must be proved beyond reasonable doubt. McHugh J also concluded that in Australian courts all contempts, whether civil or criminal, must be proved according to the criminal standard of proof. [28] It follows that the applicant's application to penalize the respondent, the State of Queensland, for contempt is not an `action, suit or proceeding of a civil nature' to which s 9 of the Act applies. This conclusion is also consistent with interpreting s 9 in the context of the preceding and subsequent sections which, together with s 9, constitute Pt 2 of the Act. If the legislature intended that s 9 of the Act should have the effect of removing the long-established principle of constitutional law that the Crown cannot directly be prosecuted or punished for contempt, it can be expected to have so stated in the clearest of terms; it did not. The application to punish the respondent for contempt was misconceived. The application for leave to appeal to this Court should be refused. [29] I nevertheless share the Chief Justice's expectation that the respondent will conscientiously adhere to the terms of any court order even though the respondent is not subject to penalties for contempt of court. I am confident that is also the community expectation." 30 Jerrard JA held at [41] - [42]: "[41] I agree with the Chief Justice that the definition of `proceeding' in the Crown Proceedings Act 1980 stands in the way of success for Claire Crowther, to the extent that she relies on the Crown Proceedings Act 1980 in her application for an order finding the State of Queensland in contempt. Proceedings for contempt do not satisfy the description of an action, suit, or proceeding of a civil nature. It follows that s 10 of that Act cannot be applied to include a power to punish for contempt. That is consistent with the difficulty in applying the provisions of UCPR rr 921 to 932, dealing with contempt, to the Crown. For example, UCPR rr 930 makes provision for punishment of either an individual (who may be punished by the court making an order that might be made under the Penalties and Sentences Act 1992 (Qld)) or a corporation. In the latter case the court can punish by seizing property or ordering a fine or both. The Crown Proceedings Act 1980 makes much more restricted provision for the satisfaction of judgments against the State of Queensland. [42] But that more restrictive provision does allow for the satisfaction of costs orders, and the respondent State of Queensland conceded that the Planning and Environment Court had jurisdiction in this matter to make injunctive orders against it. That was not challenged in this application or on this appeal. Since that power is conceded, and since the power is consistent with the terms of ss 9(2) and 10 of the Crown Proceedings Act 1980, it would also be consistent with that Act to hold that the Planning and Environment Court could declare, if so satisfied, that the respondent had not complied with the injunctive order, specifying the failure, and make appropriate declarations as to what the respondent had to do to comply, and order costs against the State of Queensland, which could include an order for indemnity costs. Those are orders which could be given in proceedings between subject and subject, and would be appropriate relief in a case of this nature. That would satisfy s 10." 31 Similar but not identical provisions to those in the Crown Proceedings Act 1980 (Qld) are found in the Judiciary Act 1903 (Cth). 32 The applicants submit that the Commonwealth is liable for a contempt by reason of ss 56 and 64 of the Judiciary Act and the contempt of court rules in Part 55 of the Supreme Court Rules (NSW) which, they say, are picked up by s 79 of the Judiciary Act. Part 55 is adopted by reference in the Land and Environment Court Rules 2007 r 4.5. I do not accept the submission. Sections 56, 64 and 79 of the Judiciary Act 1903 provide: " 56 Suits against the Commonwealth (1) A person making a claim against the Commonwealth, whether in contract or in tort, may in respect of the claim bring a suit against the Commonwealth: (a) in the High Court; (b) if the claim arose in a State or Territory – in the Supreme Court of that State or Territory or in any other court of competent jurisdiction of that State or Territory; or (c) if the claim did not arise in a State or Territory – in the Supreme Court of any State or Territory or in any other court of competent jurisdiction of any State or Territory… 64 Rights of parties In any suit to which the Commonwealth or a State is a party, the rights of parties shall as nearly as possible be the same, and judgment may be given and costs awarded on either side, as in a suit between subject and subject. 79 State or Territory laws to govern where applicable (1) The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable…" 33 In Commonwealth v Mewett (1996-1997) 191 CLR 471 at 551 Gummow and Kirby JJ (Brennan CJ agreeing) said that s 56 "recognises, rather than provides the origin of, Commonwealth liability…by identifying the forum in which certain (but not all) actions against the Commonwealth may be instituted. It deals solely with contract and tort and is facultative in nature". Section 56 therefore does not circumscribe the causes of action under which the Commonwealth may be sued. It is not concerned with criminal proceedings. 34 Section 64 refers to "any suit to which the Commonwealth…is a party". "'Suit'" includes any action or original proceeding between parties: s 2. "Cause" as defined in s 2 is a broader concept: it includes "any suit, and also includes criminal proceedings". Thus, in my opinion, s 64 is not intended to cover criminal proceedings. 35 Section 79 is essentially a procedural provision. It picks up State laws of procedure, evidence and competency of witnesses in courts exercising federal jurisdiction. In my opinion, it cannot create a liability to criminal proceedings where that liability does not already exist. Further, the immunity of the Commonwealth from criminal contempt proceedings could not be abrogated by a State statute or State court rules such as the Supreme Court Rules Part 55. Even if it could, Part 55 uses general words and there is a presumption that the general words of a statute do not bind the Crown: see [21] above. 36 It follows, in my opinion, that the Commonwealth is at least immune from criminal contempt proceedings. I leave to one side for the moment the question whether the Commonwealth is immune from civil contempt proceedings. The question then is whether these are criminal contempt proceedings. Are these criminal contempt proceedings? 37 Historically, a civil contempt has been restricted to certain types of disobedience to a court order, or breach of an undertaking to the court, in civil proceedings. Today, the historical distinction between civil contempt and criminal contempt is blurred and based on differences that are largely illusory. Lord Diplock proposed that the distinction should be jettisoned in Attorney–General v Newspaper Publishing PLC [1988] Ch 333 at 362, stating: "Of greater assistance is a re-classification as (a) conduct which involves a breach, or assisting in the breach, of a court order and (b) any other conduct which involves an interference with the due administration of justice". In Home Office v Harman [1983] 1 AC 280 at 310 D Lord Scarman said that the distinction was no longer of much importance: "The distinction between 'civil' and 'criminal' contempt is no longer of much importance, but it does draw attention to the differences between on the one hand contempts such as 'scandalising the court', physically interfering with the course of justice, or publishing matter likely to prejudice fair trial, and on the other those contempts which arise from non-compliance with an order made, or undertaking required, in legal proceedings. The former are usually the business of the Attorney–General to prosecute by committal proceedings (or otherwise); the latter, constituting as they do an injury to the private rights of a litigant, are usually left to him to bring to the notice of the court. And he may decide not to act: he may waive, or consent to, the non-compliance." 38 In Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 106 the High Court held: Punishment for contempt serves two functions: (a) enforcement of the process and orders of the court, disobedience to which has been described as 'civil contempt'; and (b) punishment of other acts which impede the administration of justice, such as obstructing proceedings in court while it is sitting or publishing comments on a pending case, which have both been described as 'criminal contempt': Fox, History of Contempt of Court (1927), p 1…The principal theoretical basis of the distinction is that disobedience to the process and orders of the court in civil proceedings is said to be a civil wrong, a matter between party and party, enforcement being for the private benefit or interest of the party seeking enforcement, whereas impeding the administration of justice is a public wrong." The Court added that it was very difficult to maintain the distinction between civil and criminal contempt and there was much to be said for the view that all contempts should be punished as if they were quasi-criminal: at 108 -109. 39 The distinction between civil and criminal contempt was addressed in detail in Witham v Holloway [1995] HCA 3, (1995) 183 CLR 525. Brennan, Deane, Toohey and Gaudron JJ held at 530 – 531 (citations omitted): "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, disobedience or breach of an undertaking amounts to a criminal contempt if it involves deliberate defiance or, as it is sometimes said, if it is contumacious. As well, in the case of some orders, described in Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd as involving `arbitrary classification', disobedience constitutes criminal contempt. They are orders forbidding interference with a ward of court, orders for the delivery up of a child and non-molestation orders. And it has been held that breach of a court order by a solicitor or by a liquidator is also a criminal contempt. … The basis of the distinction between civil and criminal contempt is said to lie in the difference between proceedings which are remedial or coercive in the interest of the private individual and proceedings in the public interest to vindicate judicial authority or maintain the integrity of the judicial process. Thus, in Australian Consolidated Press Ltd v Morgan , Windeyer J described proceedings for civil contempt as being `used primarily to compel obedience rather than to punish disobedience'." 40 Their Honours said at 534: "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 , that all proceedings for contempt `must realistically be seen as criminal in nature'. The consequence is that all charges of contempt must be proved beyond reasonable doubt." 41 After Witham v Holloway, it appeared that the distinction between criminal and civil contempt was only of historical interest given the decision that all charges of contempt were realistically to be seen as criminal in nature and had to be proved beyond reasonable doubt. That was the approach taken in Crowther v State of Queensland: see [27] above. 42 However, a distinction between civil and criminal contempt may still have significance where the legislature has distinguished between the two. For example, s 101(5) and (6) of the Supreme Court Act 1970 (NSW) provides for an appeal in any proceedings that relate to contempt 'whether civil or criminal', except for an appeal in proceedings that relate to "criminal" contempt in which the person charged is found not to have committed contempt. In Street v Hearne [2007] NSWCA 113, (2007) 70 NSWLR 231 a majority of the Court of Appeal held that a breach by a litigant of an implied undertaking not to use documents served by the opposite party except for the proper purposes of the litigation, was a civil contempt; therefore an appeal against acquittal was competent under those statutory provisions. Ipp JA [Basten JA generally agreeing) held that the allegations were "of breaches of an implied undertaking that were wilful but not contumacious in the broad sense — and were merely casual, accidental or unintentional" and hence were "prima facie civil": at [61]. His Honour concluded that the prima facie conclusion had not been rebutted: at [82]. In particular, he held that the purposes of the contempt proceedings were not punitive but remedial. 43 An appeal to the High Court failed: Hearne v Street [2008] HCA 36, (2008) 235 CLR 125. The High Court held that the proceedings were remedial or coercive, not punitive, in nature, and therefore were to be classified as relating to civil contempt: per Hayne, Heydon and Crennan JJ at [141], Gleeson CJ agreeing at [2], Kirby J agreeing at [24]. 44 The applicants submit that the purpose of these contempt proceedings is not punitive but remedial or coercive, as indicated by the form of relief that they seek; and that the proceedings are therefore civil contempt proceedings for which the Commonwealth is liable. I do not accept the submission. The coercive/punitive purpose distinction discussed in the authorities arises in the context of disobedience to an order of, or undertaking to, the court in civil proceedings. The alleged contempt in the present case is of a different kind, based on an alleged threat to a party for bringing proceedings. The proceedings are not in relation to "a civil contempt [which] involves disobedience to a court order or breach of an undertaking in civil proceedings"; they are "proceedings in the public interest to …maintain the integrity of the judicial process": Witham v Holloway at 530 – 531: see [39] above. 45 These proceedings fall within a recognised category of criminal contempt in which improper pressure is placed on a litigant to withdraw from proceedings. Such contempt tends to undermine the rule of law because it risks impeding access to the courts of law for vindication of legal rights. The gravamen of the contempt is the tendency to deter those who wish to seek curial vindication of their rights: Harkianakis v Skalkos (1997) 42 NSWLR 22 (CA) at 28 per Mason P (Beazley JA agreeing). The test is whether the conduct complained of amounted to improper pressure to induce a litigant to withdraw from proceedings: Y & Z v W [2007] NSWCA 329, (2007), 70 NSWLR 377 at [39]. In North Australian Aboriginal Legal Aid Service Inc v Bradley [2001] FCA 908, (2001) 188 ALR 312 the Chief Minister of the Northern Territory was found guilty of contempt of court for exerting improper pressure on a litigant to discontinue proceedings. 46 As the Commonwealth is immune from criminal proceedings and these are criminal contempt proceedings, the contempt charge must be dismissed. 47 It is unnecessary to decide whether the Commonwealth is also immune from civil contempt proceedings. That question might also raise for consideration whether the statutory provisions relating to enforcement of judgments apply to the Commonwealth. Although disobedience to a judgment or order (or breach of an undertaking to the court) is a species of contempt, court legislation and rules typically contain additional provisions which deal specifically with enforcement of judgments and orders. In New South Wales the distinction is drawn in the Civil Procedure Act 2005 (CPA) between enforcement of a judgment or orders in ss 130 and 133, and contempt of court in s 131. The distinction is maintained in the rules of court. Part 55 of the Supreme Court Rules 1970 (SCR) is concerned with contempt, which the court is empowered to punish by committal or sequestration (or both). The Uniform Civil Procedure Rules 2005 (UCPR) Pt 40 Division 2 is concerned with enforcement of judgments and orders, which the court is empowered to enforce by committal or sequestration. The omission of the useful power to fine as a means of enforcing judgment or orders is illogical (eg in Mudginberri a daily fine was imposed for a continuing contempt) and the relationship between SCR Pt 55 and UCPR Pt 40 is unclear. This was noted by McHugh J in Witham v Holloway at 544 fn (105) when commenting on the distinction between SCR Pt 55 and the former SCR Pt 42, which was relevantly equivalent to the current UCPR Pt 40 Division 2. I note that CPA s 130 provides that a judgment or order is not enforceable by committal, yet UCPR Pt 40 r 6(2) provides that a judgment or order may be enforced by committal. Independently of any question of liability of the Commonwealth, I would suggest that these matters warrant consideration by the Uniform Civil Procedure Rules Committee, the Supreme Court Rules Committee and perhaps the legislature. 48 I now turn to the two further reasons why I think the contempt charge should be dismissed. Does the AGS letter of 25 July 2007 prove a contempt by the Commonwealth? 49 The applicants charge that the Commonwealth is in contempt for threatening them in these proceedings by reason of the decision to withhold payments referred to in the AGS letter of 25 July 2007, quoted at [17] above. The issue debated before me was whether the letter established that it was the Commonwealth that made the decision to withhold the payments. 50 What is known from the letter is that: (a) two Commonwealth officers participated with a large majority of representatives of the NSW government or NSW entities in the Groundwater Adjustment Advisory Committee and that body unanimously recommended to an unknown decision maker that the ex gratia payments should be withheld from licence holders pursuing legal action; (b) the unknown decision maker made a decision that ex gratia payments should be withheld from licence holders pursuing legal action; and (c) the Commonwealth and its solicitors had knowledge of that decision. 51 The collegiate body, the "Groundwater Adjustment Advisory Committee" cannot be described as a Commonwealth entity. There is no evidence that it was subject to the direction or control of the Commonwealth. There is no evidence that its "recommendation" was binding on the decision maker. Mere knowledge by the Commonwealth of the decision does not establish that the Commonwealth made, or procured the decision maker to make, the decision. 52 In my opinion, the letter of 25 July 2007 does not establish that it was the Commonwealth that made the decision to withhold the payments. Was Mr Coady an authorised agent or delegate of the Commonwealth? 53 The applicants charge that the Commonwealth is in contempt by threatening them in these proceedings because its authorised agent or delegate Mr Coady, said, in a telephone conversation with Mr Taylor, one of the applicants, that should he continue as a party to these proceedings, the Commonwealth would prevent or cease any payment to him under the ASGE program. It is necessary for the applicants to prove the charge beyond reasonable doubt. 54 The threshold issue is whether it has been proved that Mr Coady was an authorised Commonwealth agent or delegate. 55 Mr Coady did not represent that he was speaking on behalf of the Commonwealth. The evidence suggests that he was an officer of the NSW Department of Natural Resources. The 2005 and 2006 letters from that NSW Department suggest that they were responsible for administering payments of financial assistance: see [12] and [13] above. The fact that statements were made in those letters about the Commonwealth and NSW providing funding for the ASGE program, and the fact that Mr Coady apparently had a role in administering the financial assistance package that was part of that program, does not justify an inference that Mr Coady was an authorised agent or delegate of the Commonwealth. The evidence does not establish that the Commonwealth had any role in the administration of payments under the ASGE program to licence holders. Nor does the evidence establish that the Commonwealth decided, or procured any other decision-maker to decide, that Mr Taylor would not be paid any financial assistance under the ASGE program. 56 In my opinion, it has not been proved that Mr Coady was an authorised agent or delegate of the Commonwealth. Conclusion 57 The orders of the Court are as follows: 1. The applicants' notice of motion filed on 22 August 2007 is dismissed. 2. The applicants are to pay the third respondent's costs of the notice of motion. 3. The exhibits may be returned. 03/06/2009 - typographical errors in lines 6 and 7 of para 9 - "1992" to "2004"and "National" to "Natural" - Paragraph(s) 9 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. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.