BHAGAT v GLOBAL CUSTODIANS LIMITED

Court of Appeal (NSW)|2002-05-07|Before: Spigelman CJ, Young J

Background Proceedings 3 Following the collapse of a financial group referred to as Estate Mortgage, a number of investors banded together to seek to recover their losses. In 1990 a trust fund known as The Estate Mortgage Fighting Fund Trust was established with the Appellant, Hari Bhagat, and other persons as trustees. The First Respondent, Global Custodians Limited, is a member of a group of companies that subsequently acquired rights with respect to the funds formerly managed by Estate Mortgage. The First Respondent instituted proceedings in the Equity Division of the Supreme Court of New South Wales seeking orders relating to the administration of The Estate Mortgage Fighting Fund Trust, including orders to the effect that it was entitled to inspect books of account of the trust. It sought these orders, inter alia, on the basis of certain Deeds of Assignment from the second and third Respondents (to whom I will refer as the "Speights") and from the fourth and fifth Respondents (to whom I will refer as the "Greenlees"). 4 In other proceedings, the judgment in which was tendered in evidence in the present proceedings (Global Custodians Limited v Mesh [1999] NSWSC 624), Justice Young had held that the Deeds of Assignment from the Speights and the Greenlees did not effectively transfer the right of a beneficiary to call for accounts and to inspect documents. After that judgment, Global Custodians Limited obtained the consent of the Speights and the Greenlees to be joined as parties. 5 The proceedings to that date were proceedings No 2539 of 1998 in the Equity Division of the Court. Global Custodians Limited sought to join the Speights and the Greenlees as Plaintiffs in those proceedings by a Notice of Motion dated 12 July 1999. 6 Out of caution, Global Custodians Limited, together with the Speights and the Greenlees as Plaintiffs, commenced proceedings No 3156 of 1999 on 12 July 1996 by way of summons seeking substantially the same relief as in proceedings No 2539 of 1998. These later proceedings were referred to in the submissions as "the parallel proceedings". 7 On 29 July 1999 Justice Young ordered that proceedings No 3156 of 1999 be heard together with proceedings No. 2539 of 1998 and that the evidence in one be evidence in the other. 8 On 27 July 1999 the Appellant commenced by summons proceedings No 3354 of 1999 with Global Custodians Limited, the Speights and the Greenlees as Defendants. The Appellant, as Plaintiff, sought orders relating to the Deed of Assignment by which the Speights and the Greenlees had assigned their interests to Global Custodians and also with respect to proceedings No 2539 of 1998 and No 3156 of 1999. 9 In the materials before this Court there is an affidavit of service of proceedings No 3354 of 1999 on the Greenlees. This affidavit indicates that the summons was served on 28 July 1999. 10 In four identical letters, dated either 30 July 1999 or 2 August 1999, the Appellant wrote to each of the Speights and Greenlees. It was this letter which was said to constitute the contempt. It should be set out in full: " WITHOUT PREJUDICE

Hari Bhagat -v- Global Custodians Ltd & Ors. Supreme Court Proceedings No. 3354/1999 Equity Division

I have been advised by the process server who served you the Summons in the above proceedings that you informed him that the Solicitors, Holding Redlich, will be paying all your legal costs.

You may not be aware that it will amount to professional misconduct if Holding Redlich pays your costs.

Global Custodians Ltd is a wholly owned entity of Royal and Sun Alliance Assurance Australia Ltd which is a public company. A public company is legally not permitted to finance legal actions of private individuals.

You are not only required to pay your own legal costs but also damages that may be awarded to me and my costs in the event I am successful.

I will commence further proceedings against you without further notice if I find that your costs are being paid by Holding Redlich or Global Custodians Ltd or any of its related or associated entities.

You have been induced into consenting to be joined as a Plaintiff in proceedings No. 2539/1998 and in commencing proceedings No. 3156/1999. I am confident neither Holding Redlich nor Global Custodians Ltd or its related entities and associates will confirm in writing any assurances that they may have given to you of meeting all your legal costs.

I therefore give you an opportunity to realise your folly and do the following to save yourself, as a pensioner, from depleting your hard earned money into paying damages and costs:

(a) Write to Global Custodians Ltd with a copy addressed to me advising them that you withdraw your consent to be joined as a Plaintiff in proceedings No. 2539/1998 and do not wish to continue to be a Plaintiff in proceedings No. 3354/1999.

(b) Inform me what valuable consideration you received from Global Custodians Ltd for making the Deed of Assignment. 8. I will, on receipt of a copy of your letter and information, seek leave to delete you as a Defendant in proceedings No. 3354/1999 provided I receive a copy of your letter addressed to Global Custodians Ltd and information as set out in paragraph 7 above not later than 5 pm on 20 August 1999.

If you fail to do so and, at a later date Damages and Indemnity Costs are awarded to me, do not come crying to me to save you from selling your house to meet the orders of the Court.

No-one is above the law and no-one can save you if you transgress the law. In receiving payment of your costs from either Holding Redlich or Global Custodians Ltd you will be transgressing the law.

If you decide not to send the letter as set out in paragraph 7 then I require you to provide me with, not later than 5pm on 20 August 1999, a letter that you will be meeting your own legal costs from your own funds and are not receiving free legal aid either from Holding Redlich or Global Custodians Ltd or its related entities or associates, failing which I may commence proceedings against you without further notice.

Please also note that if you do not inform me of the valuable consideration you received from Global Custodians Ltd for making the Deed of Assignment, then I will subpoena you to give evidence. You will be required to attend Court and pay your own legal costs and give evidence on oath. If you give false evidence on oath I will seek leave to commence criminal proceedings against you without further notice.

The Proceedings at First Instance 11 By Notices of Motion in each of proceedings No 2539 of 1998 and No 3156 of 1999, Global Custodians Limited, the Speights and the Greenlees sought orders that the Appellant be found guilty of contempt. In each case the Statement of Charge was in the following term: "The third defendant, Mr Hari Bhagat is guilty of contempt of this court in that on or about 2 August 1999 and 3 July 1999 he sent letters to Mr Arch Greenlees and Mrs Norman Greenlees and Mr Jack Speight and Mrs Jesse Speight respectively which letters were calculated to threaten and intimidate the recipients thereof so as to compel or induce them to withdraw their consent to being joined as plaintiffs in these proceedings, such action by Mr Bhagat constituting improper conduct intended to deter or obstruct the joinder of the said persons in these proceedings and an interference with the administration of justice." 12 Justice Young noted that the Respondents submitted to him that the letters were a threat to dissuade a party or witness from being involved in proceedings. His Honour noted the Appellant's submissions as follows: "Mr Bhagat said in his submissions that: (1) the letters were without prejudice and thus under s131 of the Evidence Act 1995 should not be considered by the Court; (2) the letters were sent to settle proceedings and to save the Court's time; (3) he was justified in bringing the matters referred to in the letters to the attention of the Speights and the Greenlees; (4) there was no intention to undermine justice; (5) the letters were private letters; (6) the letters were to assist justice; (7) it is not contempt to apply pressure to a person about to be involved in litigation;

(8) the threat, if it be a threat, was not accompanied by any unlawful conduct; (9) the charge was not proved beyond reasonable doubt; and (10) even if there was a contempt, it was a technical contempt." 13 Section 131 of the Evidence Act 1995 relevantly provides that evidence is not to be adduced of communications which arise out of an attempt to negotiate a settlement of disputes. I will set out the section fully below. Although not expressed, in terms, as an objection to the admission into evidence of the respective letters, that was the substance of the submission based on s131 made by the Appellant before Justice Young. His Honour treated it as such. There can be no doubt that if the letters were not admitted into evidence, then no finding of contempt could possibly be made. 14 The central part of his Honour's reasoning in this regard is found in pars [11] and [12] of his Honour's judgment: "11 There was no dispute between Mr Bhagat and Mr and Mrs Greenlees in any court prior to the writing of the letter to them. There was no attempt in the letters to 'settle proceedings'. It was an attempt to prevent the recipients of the letters joining with the present plaintiff. In any event, as Mr Lindsay SC who appeared with Mr Margo for the plaintiff puts, one cannot have a threat 'without prejudice'. 12 Accordingly, the argument based on s 131 of the Evidence Act 1995 does not assist the third defendant." 15 His Honour dealt with other aspects of the Appellant's submissions including the following. "20 It seems to me that although the law is in a rather confused state, on one side of the line it is not contempt to give advice to a potential litigant that he or she would be better off not going to law for the predominant purpose of benefiting the potential litigant rather than the writer of the letter. On the other hand, it is quite clear that a statement that if another person does go to law the consequence will be that the writer of the letter will produce material which will damage the addressee is a contempt. However, a letter written by, say, a father to a daughter to the effect that he would advise the daughter not to commence proceedings against a third party because if she did the probabilities would be that the third party would produce incriminating material would probably not be a contempt of court because it was written in the interests of the daughter, not for the benefit of the father. 21 In the instant case, the content of the letters went far beyond paternal advice to the Speights and the Greenlees. The letters stated that a very heavy financial burden borne by them if they joined with the plaintiff. It will be remembered, because this is relevant to the questions of intention, that paragraph 7 of the letters says: 'I therefore give you an opportunity to realise your folly and do the following to save yourself, as a pensioner, from depleting your hard earned money into paying damages and costs'. The threat is emphasised in paragraph 8 where Mr Bhagat says: 'If you fail to do so and, at a later date damages and indemnity costs are awarded to me, do not come crying to me to save you from selling your house to meet the orders of the Court'. 22 These letters were not fatherly advice. They do not fall into the category, as do some of the cases reviewed in Attorney General v Times Newspapers , where there might be some legitimate public interest in exposing certain facts. This, to me, is a threat to potential parties that they may well lose their home if they commence litigation or join with the plaintiff in the current litigation. Such a threat would, if the appropriate mens rea be demonstrated, to my mind constitute a contempt of court. … 24 It is certainly true in point 9 that the charge needs to be proved beyond reasonable doubt. As to this, the sending of the letters is admitted so there is no doubt at all about that aspect of the matter. I have already held that the letters were impermissible threats. Accordingly the only matter that I need to consider as to whether it has been proved beyond reasonable doubt is whether Mr Bhagat had the requisite state of mind. … 26 I could not be satisfied beyond a reasonable doubt that Mr Bhagat actually intended the letters to have the effect of dissuading the Greenlees and Speights to join with Global as parties. It may just be that his strong views in the righteousness of his cause may have meant that he genuinely believed that he was assisting the course of justice in dissuading the Greenlees and the Speights from a path of folly. Whether that be so or not, there is no doubt at all that the letters must have been calculated so to dissuade in the sense used by the authorities. Accordingly, in my view all the elements of a contempt of court have been made out." 16 At the commencement of his reasons Justice Young also said: "2 The background of the motions is that the third defendant organised a fighting fund to mount litigation against the plaintiff and others in respect of the administration of funds known as the 'Estate Mortgage Investment Funds'. There are about 15 actions commenced by the third defendant making those challenges." 17 His Honour found the Appellant to be guilty of contempt of court and made consequential orders restraining the Appellant from conducting himself in certain ways in the course of the litigation. There was no appeal relating to the kind of order his Honour made.

The Appeal 18 Pursuant to leave granted by two judges of this Court, the Appellant relied on three grounds of appeal: 1. His Honour erred in his decision that the background of the motions is that the Third Defendant organised a fighting fund to mount litigation against the Plaintiff and others in respect of the administration of funds known as the 'Estate Mortgage Investment Funds'. There are about 15 actions commenced by the Third Defendant making those challenges.

His Honour erred in his decision that there was no dispute between Mr Bhagat and Mr and Mrs Greenlees in any Court prior to the writing of the letter to them.

His Honour erred in his decision that: Accordingly the argument based on S.131 of the Evidence Act 1995 does not assist the Third Defendant." 19 The thrust of these grounds of appeal is an attack on the admission into evidence of the letter said to constitute contempt. The notice of appeal did not raise directly the issue of whether or not the letter was capable of constituting, or did in fact constitute, a contempt. During the course of the Appellant's submissions it became clear that he did wish to challenge this aspect of his Honour's decision. Although no formal amendment to the Notice of Appeal was made, Counsel for the Respondents indicated that it could meet the case made in that regard.

Fighting Fund 20 The first ground of appeal can be disposed of in short compass. The Appellant objects to his Honour's statement that the "fighting fund" was "organised … to mount litigation against the plaintiff". The Appellant stated that the fighting fund concerned proceedings against the persons originally in control of the Estate Mortgage group of companies. The First Respondent became involved much later. His Honour's reference, as quoted above, was to "litigation against the plaintiff and others". Whatever may have been the identity of the target as at the time that the fighting fund was originally "organised", it appears likely that the First Respondent has acquired an interest of a character which may be affected by the deployment of the fund. Whether that be so or not, the reference by Justice Young occurs in a part of his judgment where his Honour was briefly sketching background facts. The reference played no role of any character in the finding of contempt or consequential relief. The error, if any, was irrelevant to the result. The ground of appeal should be dismissed.

Admissibility 21 The relevant provisions of the Evidence Act are as follows: "131(1) Evidence is not to be adduced of: (a) a communication that is made between persons in dispute or between one or more persons in dispute and a third party, in connection with an attempt to negotiate a settlement of the dispute, or (b) a document (whether delivered or not) that has been prepared in connection with an attempt to negotiate a settlement of a dispute. (2) Subsection (1) does not apply if: … (j) the communication was made, or the document was prepared, in furtherance of the commission of a fraud or an offence or the commission of an act that renders a person liable to a civil penalty … (3) For the purposes of subsection 2(j), if commission of the fraud, offence or act is a fact in issue and there are reasonable grounds for finding that: (a) the fraud, offence or act was committed, and (b) a communication was made or a document was prepared in furtherance of the commission of the fraud, offence or act, the court may find that the communication was so made or the document so prepared. … (5) In this section: (a) a reference to a dispute is a reference to a dispute of a kind in respect of which relief may be given in an Australian or overseas proceedings …" 22 The Dictionary to the Evidence Act provides: "'Civil penalty' is defined in Clause 3 of Part 2 of this Dictionary" and "'Offence' means an offence against or arising under an Australian Law." 23 Clause 3 of Part 2 provides: "For the purposes of this Act, a person is taken to be liable to a civil penalty if, in an Australian or overseas proceeding (other than a criminal proceeding), the person would be liable to a penalty arising under an Australian law or a law of a foreign country." 24 The word "penalty" is not defined. It bears its natural and ordinary meaning of punishment which, in the case of a pecuniary exaction involves a payment of a punitive, rather than compensatory, nature. Civil penalties have been called "punitive civil sanctions". (See Mann, "Punitive Civil Sanctions: The Middle Ground Between Criminal and Civil Law" (1992) 101 Yale Law Journal 1795. See generally Australian Law Reform Commission Securing Compliance: Civil and Administrative Penalties In Australian Federal Regulation Discussion Paper 65, April 2002, esp at 2.44-2.50.) 25 The second and third grounds of appeal are linked in that his Honour's finding that there was no dispute between Mr Bhagat and the Greenlees (the second ground), was a finding made for the purposes of determining whether or not the letters should be excluded pursuant to s131 of the Evidence Act (the third ground). 26 Each of the letters the subject of proceedings were headed with a reference to proceedings No 3354 of 1999 which were commenced on 27 July 1999. According to evidence before Justice Young the summonses were served on each of the Greenlees on 28 July 1999. In this respect there was a dispute between the Greenlees and the Appellant on the dates of the letters said to constitute the contempt, namely 30 July 1999 in the case of Mrs Greenlees and 2 August 1999 in the case of Mr Greenlees. Furthermore, as at those dates, proceedings No 3156 of 1999, in which the Greenlees were plaintiffs, had been commenced and the notice of motion to add them as plaintiffs to proceedings No 2539 of 1998 had been issued. 27 Insofar as his Honour concluded that the communication was other than one "between persons in dispute", within the meaning of s131(1)(a), his Honour erred. However, this finding only establishes the possibility of the application of the section. It is not determinative. 28 I do not think that the letter, properly understood, satisfies s131(1) i.e. that it was a communication made "in connection with an attempt to negotiate a settlement of the dispute". It appears to me to contain peremptory demands accompanied by threats. There was no "attempt to negotiate". As Justice Young said, "merely marking a letter 'without prejudice' does not give it magical status". His Honour correctly concluded that there was no attempt in the letter to settle proceedings. 29 I will consider the elements of the letter further below. If the letter had done no more than point out the risk of an award of damages and costs, unless proceedings were withdrawn, it may well have answered the description of being made "in connection with an attempt to negotiate a settlement of a dispute". A demand for surrender may be such an attempt. However, the full context indicates that this letter cannot be so characterised. 30 Alternatively, this case can be determined by the application of s131(2)(j), which exempts from the prohibition on adducing evidence a communication made either in the furtherance of the commission of an offence, or in the commission of an act that renders a person liable to a civil penalty. 31 For the purpose of deciding whether or not evidence may be adduced, it is not necessary for a court to determine whether or not the offence was in fact committed or whether a person was in fact liable to a civil penalty. By reason of s131(3) it is sufficient if the court deciding the issue of admissibility finds that there are reasonable grounds for the requisite finding. 32 Although there is a distinction between civil contempt and criminal contempt, the distinction has often been difficult to draw. In Australia it is authoritatively established that both kinds of proceedings must be seen as essentially "criminal in nature" (Hinch v Attorney-General (Vic) (1987) 164 CLR 15 at 49; Witham v Holloway (1995) 183 CLR 525 at 534). On that basis, both civil and criminal contempt must be proved beyond reasonable doubt. As the joint judgment in Witham v Holloway 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." 33 For purposes of s137(2)(j) of the Evidence Act it appears that there remains a distinction. A criminal contempt answers the description of an "offence". A civil contempt answers the description of an "act that renders a person liable to a civil penalty". However the particular proceedings are characterised, the outcome is the same. The allegation in the present case concerned interference with the administration of justice and was, accordingly, an allegation of criminal contempt. (See AMIEU v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 108; Witham v Holloway at 530.) 34 In the present case, in my opinion, there were "reasonable grounds for finding" a contempt had been committed and, accordingly, that there was a relevant offence within s131(3) and, therefore, within s131(2)(j) and that the letter had been sent in furtherance of the offence. The basis for the finding that there were such reasonable grounds will become clear in my consideration of the argument as to whether or not there was a contempt at all.

Was There a Contempt? 35 A range of general principles applicable in the case of contempt by improper pressure on a party is set out in the judgment of Mason P in Harkianakis v Skalkos (1997) 42 NSWLR 22 at 27-30. The present is a case of that character. Of course the characterisation of "improper pressure" begs the relevant question as to what kind of pressure is "improper". 36 As Lord Cross of Chelsea said Attorney-General v Times Newspapers Ltd [1974] AC 273 at 326: "To seek to dissuade a litigant from prosecuting or defending proceedings by threats of unlawful action, by abuse, by misrepresentation of the nature of the proceedings or the circumstances out of which they arose and such like, is no doubt a contempt of court; but if the writer states the facts fairly and accurately, and expresses his view in temperate language the fact that the publication may bring pressure - possibly great pressure - to bear on the litigant should not make it a contempt of court." 37 As Mason P said in Harkianakis at 30: "In punishing certain types of interference with litigants, the law is concerned to distinguish between proper and improper pressure … This is because the litigant's freedom to conduct litigation as he or she chooses is not an absolute one. The distinction between proper and improper pressure is also encountered in restitution and contract law with their categories of economic duress … Pressure may be actual or threatened, conditional or unconditional. What is done (or threatened) may be lawful or unlawful conduct. The mere fact that something that is lawful is threatened does not mean that the pressure is necessarily proper. Were it otherwise, a threat to report a legal practitioner to a professional disciplinary body … or to commence a prosecution … could not constitute a contempt. Yet it clearly may."

(See also Borrie and Lowe, The Law of Contempt , 3rd ed (1996) Butterworths, at 442; Arlidge, Eadie and Smith On Contempt , 2nd ed (1999) London, Sweet & Maxwell, esp at pars 11-261 to 11-278.) 38 Whether or not the pressure sought to be applied in a particular case can be described as "improper", depends on all of the circumstances of the case. The various statements in the letters in these proceedings must be read in the whole context. 39 The statement that the author was giving the recipients "an opportunity to realise your folly" and withdraw the proceedings "to save yourself, as a pensioner, from depleting your hard earned money into paying damages and costs" is not, of itself, improper pressure. A firm assertion that the other party must lose and a reasonable statement of the consequences of loss is not a contempt, even if it does exert pressure on a party to withdraw proceedings. The position is otherwise if a demand of that character is accompanied by improper threats or assertions. In my opinion such are present in the letters the subject of these proceedings. 40 There are two themes in each letter. The first concerns proceedings No 2534 of 1998 and No 3156 of 1999 in which the recipients of the letters had been or were to be joined as plaintiffs. The second concerns a demand for information as to the valuable consideration that the First Respondent had given with respect to the Deed of Assignment, which may have some relevance to proceedings No 3354 instituted by the Appellant. 41 With respect to the proceedings instituted by Global Custodians Limited, the Appellant asserted that it would not be permissible for a company like Global Custodians Limited to "finance legal actions of private individuals" and for the solicitors employed by such a plaintiff to pay legal costs. To assert that such a financial relationship is impermissible in all circumstances is wrong in law. There was no reasonable basis for those assertions made by the Appellant. 42 Paragraph 4 of the letter which stated: "You are not only required to pay your own legal costs but also damages that may be awarded to me and my costs in the event I am successful"

was based on assertions that were wrong and without reasonable basis. This pressure was reinforced by an assertion that the Appellant would commence proceedings if either of the other parties were found to be paying the legal costs of the recipients. (See par 5 of the letter.) 43 The second theme in the letter was first mentioned in par 7(b), requiring the recipients to inform the Appellant of the valuable consideration for the Deed of Assignment. In the concluding unnumbered paragraph of the letter, the Appellant threatened that unless that demand was complied with he would subpoena the recipient to give evidence and that he or she would be required to attend court and pay his or her own costs. The letter asserted that: "If you give false evidence on oath I will seek leave to commence criminal proceedings against you without further notice." 44 This last reference constituted a threat which, on the evidence, had no basis of any character. There was no reason to believe that any recipient would give false evidence. The fact that the trigger for the threatened conduct was an event - "if you give false evidence on oath" - that may have made the subsequent conduct lawful, does not detract from the impermissibility of a threat of this character. 45 To the knowledge of the Appellant, as seen in the very text of the letter, the vulnerability of the recipients was such as, in my opinion, to be a material consideration when determining the degree of impropriety involved. 46 I note that in Harkianakis at 29, in the context of determining whether a publication had a tendency to interfere with the course of justice, Mason P said at 29: "There is a question as to whether the tendency is to be measured against the capacity to withstand pressure of the particular litigant party involved, or whether the court should have in contemplation some hypothetical litigant of 'ordinary' fortitude who might be capable of influence by similar pressure applied in similar circumstances". 47 His Honour did not determine the question in that case. His Honour referred to authorities that emphasise the effect of a contempt as constituting an interference with the administration of justice in a particular case and others that emphasise the effect on the administration of justice generally. 48 There are authorities which pose a distinction between an "objective" and a "subjective" test for the real tendency issue, preferring an objective test. In Resolute Limited v Warnes [2000] WASCA 359 at [19] Ipp J said: "In the circumstances, a primary question is whether the published material has, as a matter of practical reality, a real (or clear) and definite tendency to interfere with the course of justice. This question depends on an objective assessment of the relevant material. The court must 'ascertain whether the publication is such as may affect the minds of reasonable men': Fry v Bray (1959) 1 FLR 366 at 376."

(See also Attorney-General v Hislop [1991] 1 QB 514 at 526; Vajda v Nine Network Australia Limited [2000] NSWSC 873 per Bell J at [12]-[15]; see also Borrie and Lowe, The Law of Contempt esp at 208-210.) 49 These authorities are concerned with the law of contempt by publication, in which context different considerations arise when balancing the public interest in freedom of speech against the public interest in the administration of justice. In such cases the element of interference with the administration of justice is mediated by the response of the community, broader than the parties, to whom the publication is sent. At least in the present context of private communications between parties to proceedings, I see no reason why the particular vulnerability of a party, in terms for example of age and means, should not be a material consideration when determining whether the pressure was improper. At least in such a context, I do not see why the Court must choose between an objective and a subjective test. Both dimensions may be pertinent when formulating the judgment about impropriety. 50 In the present case, the very thrust of the pressure was to dissuade a party from continuing with litigation by undermining whatever sense of security that person had acquired from the undertaking of another to protect them in a material respect. Where such pressure is accompanied by threats and false allegations, in my opinion, it is permissible to take into account the vulnerability of the recipients when determining whether the pressure was improper. 51 In my opinion, the pressure applied by the letter was improper pressure in the requisite sense. The combined effect of the false assertions, the tone of the threats and the vulnerability of the recipients was, in my opinion, such as to render the pressure to desist from litigation improper. Accordingly, the letter constituted a contempt. 52 The appeals should be dismissed with costs. 53 IPP AJA: As Spigelman CJ has observed, I said the following in Resolute Limited v Warnes [2000] WASCA 359 [at 19]: "In the circumstances, a primary question is whether the published material has, as a matter of practical reality a real (or clear) and definite tendency to interfere with the course of justice. This question depends on an objective assessment of the relevant material. The Court must 'ascertain whether the publication is such as may affect the minds of reasonable men': Fry v Bray (1959) 1 FLR 366 (at 376)". 54 I agree, however, that, at least in cases of contempt of Court involving private communications to individuals, regard should be had to the subjective characteristics of the recipients of the communications. That is to say, there should be an objective assessment of the relevant materials, having regard to the subjective characteristics of the recipients of the communications. 55 Otherwise I agree with the reasons to be published by Spigelman CJ and Brownie AJA. 56 BROWNIE AJA: I agree with the Chief Justice, but wish to add some comments about a procedural question raised by the appellant. 57 The appellant submitted that the notice of motion, by which the respondents moved the court for an order that he be found guilty of contempt, was filed improperly, in that some of the applicants named in the notice of motion were at that stage neither parties, nor persons who had filed an appearance and he relied upon Part 11 rule 2, which reads: "Subject to these rules, a person shall not, except by leave of the court, take any step in any proceedings, unless, before taking the step, he has filed originating process in the proceedings or has entered an appearance in the proceedings." 58 The submission overlooked the first four words of the rule, and the distinction, found in a number of areas of the law, between a "person" and "party": see, for example, Coles Myer Limited v O'Brien (1992) 28 NSWLR 525 at 531. Within the Supreme Court Rules, Part 19 deals generally with motions, and rule 2 makes this distinction clear; and Part 37 rule 8, which deals with applications to set aside subpoenas, provides another clear example. The submission also overlooks the purpose for which Part 11 exists, and elevates the requirement that an appearance be filed into an inappropriate procedural hurdle. 59 In any event, even if the respondents should have filed an appearance, their failure to do so was only an irregularity within the meaning of s81(1)(a) of the Supreme Court Act 1970. **********

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.

CITATION : BHAGAT v GLOBAL CUSTODIANS LIMITED [2002] NSWCA 160 FILE NUMBER(S) : CA 40769/00; 40770/00 HEARING DATE(S) : 7 May 2002 JUDGMENT DATE : 29 May 2002

COUNSEL : In Person (Appellant) G C Lindsay SC (Respondents) SOLICITORS : In Person (Appellant) Holding Redlich (Respondents) CATCHWORDS : CONTEMPT OF COURT - whether improper pressure applied to a party to withdraw from proceedings - where threatening letter sent to persons consenting to be joined as plaintiffs - where letter marked 'without prejudice' - whether letter admissible - whether communication between persons 'in dispute' - Evidence Act 1995, s131. LEGISLATION CITED : Evidence Act 1995 Supreme Court Act 1970 AMIEU v Mudginberri Station Pty Ltd (1986) 161 CLR 98 Attorney-General v Hislop [1991] 1 QB 514 Attorney-General v Times Newspapers Ltd [1974] AC 273 Coles Myer Limited v O'Brien (1992) 28 NSWLR 525 CASES CITED: Global Custodians Limited v Mesh [1999] NSWSC 624 Harkianakis v Skalkos (1997) 42 NSWLR 22 Hinch v Attorney-General (Vic) (1987) 164 CLR 15 Resolute Limited v Warnes [2000] WASCA 359 Vajda v Nine Network Australia Limited [2000] NSWSC 873 Witham v Holloway (1995) 183 CLR 525 DECISION : Appeals dismissed with costs.

At a glance

Court

Decision date

Before

Source

Judgment (27 paragraphs)

Parties

Cases Cited (11)