New South Wales Supreme Court CITATION : Street & 7 Ors v Luna Park Sydney Pty Limited & 3 Ors [2009] NSWSC 767 HEARING DATE(S) : 11 June 2009 JURISDICTION : Equity Division JUDGMENT OF : Brereton J EX TEMPORE JUDGMENT DATE : 11 June 2009 DECISION : No penalty imposed - Contemnors to pay costs of contempt proceedings CATCHWORDS : PROCEDURE - Contempt - Penalty - relevant considerations – where substantive proceedings resolved – where prosecutor no longer seeks imposition of a penalty – where contemnors have given apology and undertaking to the Court – where it was initially unclear whether conduct constituted contempt and ultimately required resolution by High Court – where contemnors consented to court order – Held: No additional punitive order made (NSW) Luna Park Site Act 1990 LEGISLATION CITED : (NSW) Luna Park Site Amendment (Noise Control) Bill 2005 (NSW) Supreme Court Act 1970 s 101(6) CATEGORY : Principal judgment Anderson v Hassett (No 2) [2007] NSWSC 1444 Commissioner of Fair Trading v Partridge [2006] NSWSC 478 Hearne v Street [2008] HCA 36, (2008) 235 CLR 125 Principal Registrar of Supreme Court of New South Wales v Jando [2001] NSWSC 969, (2001) 53 NSWLR 527 CASES CITED : Principal Registrar of Supreme Court of NSW v Thanh Vu Tran (2006) 166 ACrimR 393, [2006] NSWSC 1183 R v Razzak (2006) 166 ACrimR 132, [2006] NSWSC 1366 Registrar of the Court of Appeal v Maniam (No 2) (1992) 26 NSWLR 309 Street & ors v Luna Park Sydney Pty Ltd & anor [2006] NSWSC 624 Street v Luna Park Street v Luna Park [2009] NSWSC 1 Wood v Staunton (No 5) (1996) 86 A Crim R 183 Joan Street (first plaintiff) Ros Dwyer (second plaintiff) Michael Hesse (third plaintiff) Glen Eight Pty Ltd (fourth plaintiff) Susan Hesse (fifth plaintiff) PARTIES : Robert Simkin (sixth plaintiff) Glen Frederick Billington (seventh plaintiff) Fiona Jeanette Billington (eighth plaintiff) Luna Park Sydney Pty Ltd (first defendant) Metro Edgley Pty Ltd (second defendant) Peter Hearne (third defendant) Warwick Doughty (fourth defendant) FILE NUMBER(S) : SC 2267/05 COUNSEL : Mr J A Potts (first & second defendants) Wise Legal (plaintiffs) SOLICITORS : Clayton Utz (first & second defendants) Esplins (third & fourth defendants) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION BRERETON J Thursday 11 June 2009 2267/05 Joan Street & 7 Ors v Luna Park Sydney Pty Ltd & 3 Ors JUDGMENT (ex tempore) 1 HIS HONOUR: On 5 April 2005 the plaintiffs commenced proceedings in this Court against Luna Park Sydney Pty Ltd ("LPS") and Metro Edgley Pty Ltd, claiming injunctive and other relief in respect of an alleged nuisance caused by noise emanating from the Luna Park site. Mr Hearne and Mr Tierney had the conduct of the defence on behalf of the defendants. 2 The following summary of the relevant facts is largely taken from the summary of facts at Hearne v Street [2008] HCA 36, (2008) 235 CLR 125, 126-127. On 18 April 2005, an article appeared in a Sydney newspaper quoting excerpts of affidavits filed on behalf of the plaintiffs, but not yet read into evidence. The plaintiffs complained about the release of the affidavits by the defendants to the newspaper, and sought and obtained an undertaking not to release any unread affidavits to the media or to any other person not connected to the proceedings. On 20 April 2005, solicitors for the then defendants issued an unreserved apology for the release of the affidavits and provided, on behalf of LPS and its directors, the express undertaking sought. 3 Orders were made for further discovery and the exchange of expert evidence, and an expert report of a noise expert, and an affidavit of one of the plaintiffs, Susan Hesse, were filed and served. On 25 July 2005, Mr Hearne requested the Minister for Tourism, Sport and Recreation to consider introducing legislation to amend the (NSW) Luna Park Site Act 1990, to ensure that the operations of Luna Park were protected against the existing and future complaints about noise emanating from the site. On the same day, he sent an email to an officer of the Minister, attaching a page and a half of Ms Hesse's affidavit and a page of the report of the noise expert. On 11 October 2005, the State Government announced that it would introduce the (NSW) Luna Park Site Amendment (Noise Control) Bill 2005. On 13 October, Mr Tierney sent to the Minister's office the email and documents sent by Mr Hearne on 25 July, to be used as debating material in the Legislative Assembly. 4 The Bill was passed on 18 October 2005, and the Act was assented to on 19 October. It had the effect of preventing the plaintiffs from succeeding in the proceedings as they were then framed. The plaintiffs sought an order that the defendants pay the costs thrown away, and obtained an order that LPS answer interrogatories about the dealings between it and the State Government. The answers to those interrogatories revealed the email and attachments sent by Mr Hearne and Mr Tierney to the office of the Minister. 5 On 15 March 2006, the plaintiffs brought contempt proceedings against Mr Hearne and Mr Tierney. Gzell J found that the forwarding by Mr Hearne of part of Ms Hesse's affidavit on 25 July 2008 was a breach of an implied undertaking given by LPS, but that neither Mr Hearne nor Mr Tierney had given any undertaking to the Court, and neither had any knowledge of the implied undertaking given by Luna Park Sydney and its solicitors. Accordingly, his Honour dismissed the charges [Street & ors v Luna Park Sydney Pty Ltd & anor [2006] NSWSC 624]. 6 The plaintiffs appealed to the Court of Appeal. The Court of Appeal held (by majority: Ipp and Basten JJA, with Handley AJA dissenting) that the implied undertaking by the defendant companies was imposed by law and was also binding on Mr Hearne and Mr Tierney, and that it was not necessary for the directors to have known of the implied undertaking, it being sufficient to constitute a breach of the obligation that each knew that the proceedings were pending, and that the documents were produced in accordance with the Court's process. The Court held that the appeal was competent since the proceedings were not punitive and, therefore, it were civil proceedings for the purposes of (NSW) Supreme Court Act 1970, s 101(6). The Court of Appeal accordingly made orders adjudging each of Mr Hearne and Mr Tierney to be guilty of contempt of court. 7 The contemnors obtained special leave to appeal to the High Court of Australia, but on 6 August 2008, the High Court unanimously dismissed their appeal [Hearne v Street]. In particular, the High Court held that the implied undertaking not to use documents or information filed in court for a purpose unrelated to the conduct of a proceeding was a substantive obligation, arising by virtue of the circumstances under which the relevant person obtained the document or information; that a third party was bound by the undertaking if it knew that the material originated from legal proceedings; and that the distinction between what was remedial or coercive on the one hand, and what was punitive on the other, corresponded with the distinction between seeking to procure compliance with the relevant obligation, and seeking to impose a sanction for a breach of it. On the facts of the case, their Honours concluded that these contempt proceedings were not punitive, and thus did not relate to criminal contempt. 8 After the decision of the High Court of Australia, the contemnors tendered to this Court an apology, and an undertaking that they would not repeat the conduct, the subject of the finding of contempt. 9 The proceedings were remitted for hearing on penalty. Judgment has since then been given in the substantive proceedings, [Street v Luna Park [2009] NSWSC 1]. Ultimately, the parties agreed that I should also deal with the question of penalty in the contempt proceedings, largely because of the potential inter-relationship between the question of costs in the substantive proceedings generally, and the question of penalty in the contempt proceedings. 10 Directions were made for the exchange of the submissions and evidence on the question of costs in the main proceedings, and on the question of penalty in the contempt proceedings, and a hearing of those matters has been set down for 31 August 2009. 11 Some days ago, the Court was informed that the parties to the main proceedings had resolved all outstanding issues between them, including costs. As part of that arrangement, the plaintiffs have agreed to withdraw the submissions they had made on the question of penalty, and they now do not seek to be heard on that question, so far as they are concerned, the apology which the respondents have tendered to the Court is accepted. 12 In proceedings for civil contempt the purpose of a penalty is primarily coercive, although some punitive and denunciatory elements are necessarily involved in order to reinforce to the contemnor and the public the importance and significance of compliance with orders of the Court. In Registrar of the Court of Appeal v Maniam (No 2) (1992) 26 NSWLR 309 Kirby P, as his Honour then was, said: Thus, in determining the punishment which is apt to the circumstances which have led to a conviction of contempt, it is appropriate to bear in mind the purposes of punishing the contemnor; deterring the contemnor and others in the future from committing like contempts; and denouncing the conduct concerned in an approximately emphatic way. 13 The judgment of the High Court of Australia in the current proceedings expounded - as was necessary to found the Court of Appeal's jurisdiction to entertain the appeal – the civil nature of these contempt proceedings, and their primarily coercive purpose. 14 So far as the coercive purpose is concerned, the contempt has been purged by the apology and undertaking to the Court tendered by the contemnor. Moreover, the substantive proceedings are now at an end, in circumstances where all outstanding issues have now been resolved. There is thus no further potential for misuse of the material produced in these proceedings in an inappropriate manner, whether to influence the outcome or otherwise. The High Court emphasised that the primary purpose of these proceedings was to secure compliance with the obligation, rather than to punish for past breaches of it; that primary purpose has therefore now been secured. 15 In what I say in these observations, I would not want it to be thought that the importance and impact of the contempt that occurred is to be trivialised; it is not. It involved a serious misuse of information obtained on compulsory process, which ought not to have been made publicly available when it was, in a way and for a purpose which, in effect, resulted in the plaintiffs' case, as it then was, being defeated by legislative Act. That is, to my mind, a very serious matter indeed. This is a case in which the misuse of the information has had grave adverse consequences for the other parties. 16 In Wood v Staunton (No 5) (1996) 86 A Crim R 183, Dunford J set out a list of ten factors to be considered as relevant to proper punishment for contempt, which are now commonly considered by judges sentencing for contempt [see for example, Principal Registrar of Supreme Court of New South Wales v Jando [2001] NSWSC 969, (2001) 53 NSWLR 527, 532-535 [17]-[35] (Studdert J); Commissioner of Fair Trading v Partridge [2006] NSWSC 478, [22] (Bell J), Principal Registrar of Supreme Court of NSW v Thanh Vu Tran (2006) 166 ACrimR 393 [34]-[35], [2006] NSWSC 1183 (Buddin J); R v Razzak (2006) 166 ACrimR 132, [2006] NSWSC 1366, [43] (Johnson J); see also Anderson v Hassett (No 2) [2007] NSWSC 1444, [6]]. Not all of those factors are relevant in the present context, as they were largely developed in the context of contempts committed by witnesses who refuse to give evidence or answer questions. Nonetheless, they remain a useful guide. Those factors are, first, the seriousness of the contempt proved; secondly, whether the contemnor was aware of the consequence to himself or herself of what he or she did; thirdly, the actual consequences of the contempt on the relevant trial or inquiry; fourthly, if the contempt was committed in the context of serious crime; fifthly, the reason for the contempt; sixthly, whether the contemnor has received any benefit by indicating an intention to give evidence; seventhly, whether there has been any apology or public expression of contrition; eighthly, the character and antecedents of the contemnor; ninthly, general and personal deterrence; and tenthly, the denunciation of the contempt. 17 In the context of this case, I do not propose to deal with each of those ten items seriatim, but I have considered each of them so far as they are relevant. It will be evident from what I have already said that this is a contempt which, having regard to its actual consequences on the relevant trial or inquiry, cannot be regarded as a trivial one. It was one of moderate gravity. On the other hand, the respondents were unaware that their conduct was contemptuous when they engaged in it. In circumstances where their defence succeeded at first instance, and the decision of the Court of Appeal was a majority one, with a significant dissent from Handley AJA, and the High Court granted special leave and ultimately, it required the High Court of Australia to settle that their conduct was indeed contemptuous, it cannot be said that they were unreasonable in not realising that their conduct was contemptuous at the time. That, I think, is a highly significant matter. 18 Next, once it was established that their conduct was contemptuous, they did proffer the apology and undertaking to which I have referred. 19 Next, the plaintiff does not now press for a penalty. In the context of a civil contempt – although the respondents of course remain answerable, not just to the plaintiffs but to the Court, and it has not been suggested that the parties can remove the Court's discretion in this respect by an agreement between them – nonetheless, when all issues between the parties have been settled, the attitude of the prosecutor is, I think, a significant matter for the Court to take into account. After all, the contempt proceedings arose in the context of the civil dispute between the parties, and if they had been able to resolve the whole of their dispute, the Court should not be over enthusiastic to perpetuate an aspect of it. 20 Next, the respondents have, in any event, been ordered, by the consent orders made earlier today, to pay the costs of the contempt proceedings at first instance before Gzell J. (They have previously been ordered to pay the costs of the appellate proceedings). 21 The Court's discretion and the range of punitive orders available to it in this context is wide. It extends from making no order at all beyond the judgment of contempt given by the Court of Appeal, through making adverse costs orders, to imposing fines, terms of imprisonment, and even indefinite imprisonment. The imposition of a penalty by way of no more than an order for costs, sometimes on an indemnity basis, is not an uncommon outcome in civil contempt proceedings when the coercive purpose has been achieved. Such an order has already been made. In my view, having regard to the other factors to which I have referred, it sufficiently meets the need for a sanction of the contempt found by the Court of Appeal. 22 Accordingly, other than the costs order in respect of the contempt proceedings which I made this morning, there will otherwise be no further order in the contempt proceedings. ********** 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.