Adlam v Noack

3 The contempt proceedings, although pursued by notice of motion in the principal proceeding: O 40 r 5 of the Federal Court Rules, are separate proceedings in the sense that they are not proceedings in a matter arising under the Workplace Relations Act 1996 (Cth) even though the principal proceeding has that character. Consequently, s 347 of the Workplace Relations Act 1996 (Cth) does not apply to preclude or inhibit the making of any order for costs in respect of the contempt. In my view, there is no material difference in that respect between s 347 of that Act and s 197A of the Conciliation and Arbitration Act 1904 (Cth). I accordingly follow the decisions to that effect under that earlier legislation: Viner v Australian Building Constructions Employees' and Builders Labourers' Federation (1981) 56 FLR 5 at 27-32; Gregory v Philip Morris Ltd (1987) 74 ALR 300 at 308.

4 The evidentiary material adduced by Carolyn Jennifer Adlam ("Ms Adlam") on the hearing on penalty included an affidavit of Mr Noack sworn on 17 September 1999. Counsel for Ms Adlam sought to have Mr Noack present himself for examination in relation to matters touched on by that affidavit, and in relation to the terms of a proposed (but never consummated) resolution of the wider issues concerning Mr Noack and the organisation. The fact of such a proposal and its (then) future consideration by the Federal Council of the organisation was reported by counsel for Mr Noack on 22 September 1999 when the penalty hearing was first listed. The hearing was then adjourned because (as I was told) the proposed resolution, if agreed to by the National Council of the organisation, would lead to matters of significance on the question of penalty. The National Council did not, as was reported to me, agree to that proposal.

5 The circumstances in which the application to examine Mr Noack was made were different from those addressed by Beaumont J in W R Carpenter & Co Pty Ltd v Wollongong Instant Scaffolds Pty Ltd (1992) 36 FCR 10. In that case, a person charged with contempt for disobeying an order of the Court gave evidence by affidavit in relation to whether there had been a contempt committed. Beaumont J permitted him to be cross-examined on the affidavit. His Honour applied certain observations of Lord Denning M R in Comet Products UK Ltd v Hawkex Plastics Ltd [1971] 2 QB 67 at 74. As it happened, on the hearing of the charge in the matter before me, the same procedure occurred. Although not obliged to do so, Mr Noack chose to give evidence on the hearing. Given the nature of the charge, I had earlier directed that he be permitted to give evidence-in-chief orally rather than by affidavit (see O 40 r 5(2) of the Federal Court Rules). He was then cross-examined.

6 On the penalty hearing, Mr Noack elected not to give evidence. He did not seek to read or rely upon his affidavit sworn on 17 September 1999. In those circumstances, I did not consider it appropriate to direct that he make himself available for examination (or cross-examination) on his affidavit or in relation to the proposed terms of settlement. I do not consider that Mr Noack is bound to give evidence on the penalty hearing. He has exercised his right to choose not to do so. The effect of the application, if acceded to, would have been to compel him to do so. Even if the notice of motion does not constitute a criminal proceeding as defined in the Evidence Act 1995 (Cth) ("the Evidence Act") so that Mr Noack would not be competent to give evidence at the behest of Ms Adlam: s 17, Evidence Act, the nature of the proceeding is sufficiently analogous to that of a criminal proceeding to have regard to the policy considerations which s 17 reflects. In Mudginberri at 109 it was said that there is "much to be said for the view that all contempts should be punished as if they are quasi-criminal in character". In Witham v Holloway (1995) 183 CLR 525 at 534 ("Witham") Brennan, Deane, Toohey and Gaudron JJ described the differences upon which the distinction between civil and criminal contempt is based as being "in significant respects, illusory" and their Honours referred with approval to the observation of Deane J in Hinch v Attorney-General of Victoria (1987) 164 CLR 15 at 49 that all proceedings for contempt "must realistically be seen as criminal in nature". Their Honours also explained that to describe proceedings for contempt as essentially criminal in nature is not to equate them with the trial of a criminal charge. It is largely because the proceedings have that character that, even if I have the power to compel Mr Noack to make himself available for examination, I declined to direct Mr Noack to present himself to give further evidence.

7 In addition, strictly speaking, Mr Noack's affidavit read by Ms Adlam through her counsel becomes part of the evidence led by Ms Adlam. That evidence is required to be by affidavit, unless the Court otherwise orders. No particular consideration of fairness to Ms Adlam dictates that Mr Noack be available for further examination-in-chief. It was her choice to present his affidavit as part of the evidence she adduced on the penalty hearing, albeit without opposition from Mr Noack.

8 Finally, in making that ruling, I had regard to s 131 of the Evidence Act. It applies in so far as the proposed questioning of Mr Noack was to be directed to the terms of the proposed settlement of the wider issues confronting or concerning Mr Noack and the organisation. That there is a dispute between Mr Noack and Ms Adlam is evident. I have been told briefly of other matters of dispute concerning Mr Noack, and of other proceedings in this Court at least arising in part from those matters. I have been told that the proposed settlement was an attempt to negotiate a settlement of the dispute or disputes. If there is no dispute between Mr Noack and the organisation as such, the organisation would be a third party with an interest in resolution of the dispute or disputes and a third party to which s 131(1)(a) of the Evidence Act refers. Accordingly, subject to s 131(2), s 131(1) in my view would preclude evidence being adduced of discussions or of any documents prepared in connection with the proposed resolution of the dispute or disputes.

9 Counsel for Ms Adlam referred to s 131(2)(b) and (c) in support of the contention that s 131(1) did not apply. However, I do not think that the facts attract the operation of either of those two exceptions to the operation of s 131(1). Section 131(2)(b) operates if "the substance of the evidence has been disclosed" with the consent of all persons in dispute. I have carefully considered what was said by counsel for Mr Noack on 22 September 1999 on the topic. He did not disclose the substance of the terms of the proposed settlement, nor indeed any of its terms. He did say that there was a proposed settlement, that it was hoped or expected that the National Council of the organisation would endorse or accept it on the following day, and that its terms would be of fundamental significance to many of the considerations relevant to penalty. In my judgment those matters, relevant as they were to the application to adjourn the penalty hearing, did not disclose the substance of the proposed evidence, ie. the terms of the proposed settlement. Nor do I have any foundation for being satisfied that what was then said on behalf of Mr Noack was said with the express or implied consent of all the persons in dispute, as distinct from Mr Noack. Those conclusions also deal in part with the exception which s 131(2)(c) provides. I am not satisfied that the substance of the proposed evidence was partly disclosed by counsel for Mr Noack, nor that what he said was with the consent of all the persons in dispute. In addition, as Mr Noack has led no evidence at all on the topic relevant to the penalty for his contempt (as distinct from the submissions having been made to secure an adjournment of the penalty hearing), and Ms Adlam has also led no evidence on the topic of the then proposed settlement, I am not satisfied in any event that full disclosure of the settlement discussions or of any document recording the proposed terms of settlement is necessary in evidence to enable a proper understanding of other evidence that has been adduced. Counsel for Ms Adlam also referred to ss 131(2)(e), (h) and (i) but I do not think that they advance the contention.

10 Accordingly, I declined the application for Mr Noack to present himself to be cross-examined.

11 It was submitted by counsel for Ms Adlam that, in determining the appropriate penalty for the contempt which I have found to have been committed, I should find that Mr Noack will not himself pay any fine in any event, or may be assisted in the payment of any fine by his friends. Reliance was placed upon the observations of Northrop J in Durack v Gallagher (1982) 44 ALR 272 at 287 ("Gallagher"). On appeal, Bowen CJ and Fitzgerald J (Gallagher v Durack (1982) 44 ALR 477 at 491) said that they could not see why the consideration that the contemnor would not personally sustain the loss imposed by any fine was not a proper one in the particular circumstances of those contempt proceedings. Jenkinson J (at 502-503) found it unnecessary to express any opinion on the point.

12 On appeal to the High Court: Gallagher v Durack (1983) 152 CLR 238, Gibbs CJ, Mason, Wilson and Brennan JJ at 245 appear to have endorsed that view in the following terms:

"If the court comes to the conclusion that a person convicted of contempt of court will not personally suffer or be deterred by a fine, that is a matter which it may consider in imposing sentence. It is of course clear that the Federal Court reached its conclusion that a sentence of imprisonment should be imposed chiefly because of the gravity of the contempt, and that the matters to which reference has just been made provided only an additional consideration."

13 Those observations of the High Court and of the Full Court of this Court show that the penalty there imposed was fixed notwithstanding any circumstance that the contemnor would have had any fine paid by others. They do not form part of the ratio decidendi of the case. They are nevertheless observations which I should generally follow. However, I do not need to address that question further as I am not satisfied to the necessary degree (see Matthews; Real Tech Systems Integration Pty Ltd v Meuross (Lehane J, 21 November 1997, unreported)) that Mr Noack will not personally incur any fine imposed upon him or that the imposition of a fine will not have a deterrent effect. There is evidence that Mr Noack has been lent a substantial sum by another official of the organisation, and that he and others have contributed over a number of years to a Team Fund from which he borrowed for the purposes of partly funding an appeal against the decision of Judge Sulan to which I have referred in my earlier reasons. That Team Fund is still of significant proportions. I do not think that that evidence supports the conclusion urged upon me that Mr Noack will not personally pay any fine. The monies he has thus far received have been by way of loan. There is nothing to indicate that they do not have to be repaid. Moreover, Mr Noack's affidavit deposes to his belief that he will have to pay any fine imposed upon him. The sort of evidence which Northrop J addressed in Gallagher was not adduced before me.

(b) Does the finding of contempt amount to a "prescribed offence"?

14 Counsel for Ms Adlam contended that I should "record a conviction" for contempt of court. He submitted that such a conviction may constitute a "prescribed offence" under s 227(1)(a) or (c) of the Workplace Relations Act 1996 (Cth). He submitted further that, in that event, Mr Noack would cease to hold office at the expiration of twenty-eight days from the date of such conviction: s 228(2), and would be precluded from standing for election for office for a term: s 228(1), unless Mr Noack were to have made application for, and then obtained, an order under ss 229 or 230 of that Act. Counsel for Mr Noack contended that I should not proceed as invited, and that in any event contempt of court does not amount to a prescribed offence under s 227 of that Act.

15 I do not propose to depart from the usual method of recording that a contempt of Court has been committed, that is, by declaring the contempt found to have been committed: see eg. Lindgren J in LED Builders Pty Ltd v Eagle Homes Pty Ltd [1999] FCA 1213 ("LED Builders"); Sackville J in Australian Securities and Industries Commission v Matthews [1999] FCA 803. The applicability of Pt IX Div 6 of the Workplace Relations Act 1996 was not fully argued. Moreover, as appears below, Mr Noack is no longer employed as an officer of the organisation and does not intend to stand for any elected office. Accordingly, I do not consider it necessary or appropriate to resolve the question. Division 6 contains ss 227-230, and deals with disqualification from office. Counsel for Mr Noack did not submit that the existence of Div 6 of that Act, even if it arises in the present circumstances, should affect the nature of the order which I make on this charge. Consequently, I do not need to have regard to the possibility of the consequence which Ms Adlam says will flow from "a conviction" for contempt. In Witham, the High Court discussed the difference between civil and criminal contempt (per Brennan, Deane, Toohey and Gaudron JJ at 530-534, and per McHugh J at 538-539). As I observed earlier in these reasons, the majority judgment described the differences upon which that distinction is based as being "in many respects, illusory" (at 534). It is a matter better left for consideration when the circumstance directly arises as to whether s 227 does apply to an order declaring a person to have committed a contempt of court in circumstances such as the present.

16 Contempt of court is a serious matter. If parties to litigation do not obey orders of the court, that strikes at the system of administration of justice. It impedes the just resolution of issues between the parties. It must be punished in a significant way.

17 Counsel for Ms Adlam urged that the appropriate relief is a term of imprisonment. That is one option available to the Court. In Hudson v Australian Competition & Consumer Commission [1999] FCA 891, Spender, Burchett and Hely JJ refer to a number of contempt cases in which such an order as been made. Ms Adlam has described the very significant distress and upset which she has experienced by reason of Mr Noack's conduct towards her over a considerable period. The contempt is but one piece of conduct contributing to that distress and upset. As I have found that the contempt was directed at harassing her, I take into account that it has added to her distress and upset. The position of the person who was to be protected by the order of 22 July 1998 has not, by reason of the contempt, been so protected.

18 I have found the contempt to have been a deliberate one. It was committed in the face of cautions given by others at the State Council meeting of 7 October 1998. It was manipulative in the sense (as I found) that Mr Noack seized upon certain informal comments of Ms Forrestal and Ms Huemmer as providing the opportunity to harass Ms Adlam.

19 Those matters have caused me grave concern. It is also of concern that Mr Noack has expressed no remorse or contrition in relation to the contempt. However, there are other matters which Mr Noack's counsel has drawn to my attention and which, after careful consideration, have led me to the view that a fine is the appropriate punishment.

20 Mr Noack is forty-seven. He worked in the vehicle industry between 1976 and 1985, during which time he became involved in the affairs of the then Vehicle Builders Employees Federation. After a period of unemployment, he stood for and was elected as Assistant Secretary of the South Australian Branch of that organisation. In 1992, he became its Secretary. He held that office at the time it amalgamated into the organisation. Thereafter, until his election as State Secretary from 1 January 1998, he held office as the Regional Secretary of the Vehicle Division of the organisation.

21 He has a good work history. He has no prior record of contempts of court or of other criminal convictions. His affidavit shows that, following certain observations made to his counsel in his presence by von Doussa J on 14 October 1998 during a directions hearing on the order to show cause, he took steps to absent himself from certain meetings of the organisation when matters arose concerning his conduct or Ms Adlam. Although Ms Adlam maintains that in certain respects Mr Noack continues to harass her, that conduct is denied by Mr Noack and I do not find it proved on the penalty hearing. I proceed on the basis that Mr Noack did try to reduce contact between himself and Ms Adlam.

22 Mr Noack's position has altered since submissions as to penalty were first made. At that time, Mr Noack had been charged under Rule 13 of the Rules of the organisation that he had engaged in conduct involving gross misbehaviour on his part, the conduct being the contempt of court which I found to have been made out. The National Council of the organisation then proposed to hear that charge on 27 and 28 October 1999. I was asked at the time of those submissions to await the outcome of the hearing of that charge, as it may be relevant to the question of penalty for the contempt. I subsequently received further written submissions from Mr Noack and Ms Adlam.

23 On 28 October 1999, Mr Noack resigned from his position as State Secretary of the South Australian branch of the organisation. He has also agreed with the organisation that he will not henceforth nominate for, nor consent to be nominated for, any elected office in the organisation. The charge, in those circumstances, was not proceeded with.

24 Clearly, now, Mr Noack will not have ongoing contact with Ms Adlam as she pursues her employment.

25 I also bear in mind, as Mr Noack's counsel submitted, that the conduct of Mr Noack which I have found to constitute contempt was in the context of a factional struggle within the South Australian branch of the organisation, in which Ms Adlam was a member of the opposing faction. That may explain, in part, why Mr Noack committed the contempt. It does not, of course, excuse it. It may however have clouded his judgment about his conduct, although I have found that he did proceed with that conduct consciously in the face of the Court's order. I also bear in mind that the conduct did not involve direct confrontation of Ms Adlam because she was not present at the State Council meeting on 7 October 1998. That may have been fortuitous. It was nevertheless conduct directed at harassing her. I do not think that that matter weighs greatly on the side of mitigation in the penalty scales.

26 In my judgment, a substantial fine is called for. I take into account that Mr Noack is no longer employed by the organisation. He submitted that the penalty for his contempt should be fixed having regard to that fact, and further that he now has no prospects of employment. The submission also stated "The submissions on penalty previously made … regarding his employment, income, assets and liabilities are withdrawn". That submission does not make any assertion that Mr Noack's position has not been enhanced, to some extent, by some form of payment negotiated at the time of his retirement. Ms Adlam's written submission indicates that she would not accept without evidence (if it were asserted) that Mr Noack did not receive a substantial payment at the time of his resignation. Ms Adlam seeks that Mr Noack disclose the terms of any overall settlement. For reasons given earlier in this judgment, I am not prepared to direct him to do so. In accordance with the submissions put on his behalf, I take into account Mr Noack's employment circumstances. I no longer have regard to the initial contention that he has only a modest of personal assets, but it is not necessary to know the precise level of those assets. It does not now cause me to reduce any fine which I would otherwise impose. I also fix the fine having regard to the costs order which I am about to make in Ms Adlam's favour. It is to be a costs indemnity order. It constitutes part of the penalty which I impose, and will be a substantial sum. That factor reduces very significantly the amount of the fine which I would otherwise impose.

27 I was also asked by Ms Adlam to have regard to Mr Noack's attitude to paying the judgment and costs ordered by Judge Sulan on 29 and 30 April 1998 in the proceedings in the District Court of South Australia to which I referred in my earlier reasons. The judgment sum of $5,000 was paid only after a bankruptcy notice had been served on Mr Noack on 1 October 1998. The costs have not yet been fully taxed. The bill of costs was lodged for taxation in January 1999, and the claimed costs are being vigorously disputed. I do not consider that those matters are relevant to the penalty which I should impose in respect of the contempt which I have found proven. In addition, there are many reasons why a person against whom judgment has been entered may not pay the judgment sum or costs promptly. There is insufficient material before me to ascribe to Mr Noack a lack of preparedness to accept the decision of Judge Sulan as the reason for any delay. He may have wished to await the outcome of his appeal, delivered on 20 August 1998, before making payment of the judgment sum. I also do not know sufficient of the claim for costs, or of the contests about that claim, to form any view that the taxation process is being misused. I do not need to consider whether the contention, if made out, would be relevant to assessing the penalty for the contempt which I have found proved.

28 Having regard to all the matters the subject of submissions, and including the matters discussed above, in my judgment the appropriate penalty for the contempt is the imposition of a fine of $7,500 in addition to the costs order which I propose to make.

29 It is a matter of discretion whether I should order Mr Noack to pay Ms Adlam's costs of the notice of motion, and if so upon what basis. McIntyre v Perkes (1988) 15 NSWLR 417 indicates that there is no principle that, where a private litigant prosecutes a contempt of court, that litigant is routinely awarded costs on an indemnity basis, although such an order is made from time to time, particularly where no other punishment for the contempt is ordered: see at 421-428, and 434-436. That order is not always made: see eg. per Lindgren J in LED Builders at pars 64-67.

30 In my judgment, it is appropriate to order that Mr Noack pay Ms Adlam's costs of and incidental to the notice of motion of 13 October 1998. It was proper for her to have brought the motion to vindicate the authority of the Court. Her charge has been found to have been proved. In addition, I propose to order that those costs be taxed on a solicitor and client basis, rather than on a party and party basis, to the intent that she should recover all her costs of and incidental to the motion provided that they were not unreasonably incurred or that they, or items of them, are not of an unreasonable amount. I have had regard to the circumstances in which Ms Adlam was, in effect, obliged to institute the contempt proceedings. She is not only endeavouring to protect her own interests, but is also ensuring that the infringement of an order of the Court does not go unremarked. I have, to a not insignificant degree, tempered the fine which I would otherwise have imposed upon Mr Noack, to reflect the order for costs in those terms.

1. I declare that Mr Noack committed a contempt of the Court by breaching par 4 of the orders of the Court made on 22 July 1998 not to engage in any conduct calculated to harass Ms Adlam pending the hearing and determination of the rule to show cause made on 15 July 1998 in that he promoted and moved on 7 October 1998 the purported resolution of the South Australian State Council of the organisation of that date concerning the Women's Committee of the South Australian branch of that organisation.

3. I order that Mr Noack pay to Ms Adlam her costs of and incidental to the notice of motion of 13 October 1998 to be taxed on a solicitor and client basis, to the intent that she should recover from Mr Noack indemnity for her costs except to the extent that they may have been unreasonably incurred and to the extent that they, or any items of them, may be of unreasonable amount.

32 I will hear counsel for Mr Noack about the time to be fixed to pay the fine.

I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.

Associate: Dated: 23 November 1999 Counsel for the Applicant: Mr S J Howells and Mr J W Weatherill

Solicitors for the Applicant: Lieschke & Weatherill

Counsel for the Respondent: Mr G F Barrett QC with him Mr F Di Fazio

Dates of Hearing: 22 September 1999, 24 September 1999, and 6 October 1999