CAPAAN v JOSS, MANAGING DIRECTOR, WESTPAC

PRACTICE and PROCEDURE - Court of Appeal - contempt of court - initiated by notice of motion - procedure unavailable - complainant might initiate proceedings of his own as prosecutor in own name - but motion, as brought, properly dismissed - summons for leave to appeal from order of dismissal, dismissed. Supreme Court Act 1970, s48(2)(i) and 48(4)(a). Supreme Court Rules Pt55 R11.

Kirby P Before the Court is a summons for leave to appeal.

A BANK OBTAINS JUDGMENT AND AN ORDER FOR POSSESSION

Westpac Savings Bank Ltd (the bank) commenced proceedings by a statement of claim against Mr B Capaan and his wife, Mrs E Capaan. The bank sought judgment against Mr and Mrs Capaan. The bank was seeking to recover what it claimed to be the unpaid principal and interest in respect of moneys which it alleged that it had lent to Mr and Mrs Capaan.

Mr and Mrs Capaan filed a defence and a cross-claim to the bank's claim. In June 1992 Master Greenwood struck out the defence and cross-claim. No appeal has ever been brought against Master Greenwood's decision.

Pursuant to leave which Master Greenwood granted, an amended defence and cross claim were then filed by Mr and Mrs Capaan. However, on 28 August 1992 this document was also struck out by order of Master Greenwood. Master Greenwood referred the proceedings to Prothonotary Whalan. He gave leave to the bank to apply to Prothonotary Whalan for summary judgment against Mr and Mrs Capaan. No appeal was brought by Mr and Mrs Capaan against these orders made by Master Greenwood.

On 28 August 1992 Prothonotary Whalan directed the entry of judgment for the bank against Mr and Mrs Capaan. Judgment was then entered, apparently in the sum of $248,407.84. That judgment of the Supreme Court stands. It has not been set aside. Nor, as it appears, has any appeal been brought against that judgment. This Court today is not concerned with any appeal against that judgment or any complaints which Mr and Mrs Capaan may have against the bank leading to the entry into the loan which has come to fruit, following default, in the judgment for the bank in the large sum which I have mentioned.

Mr and Mrs Capaan had given a registered mortgage to the bank. The mortgage is dated 26 May 1988. It is a mortgage, apparently in orthodox terms and known as a "all moneys" mortgage. It was granted with the security over Mr and Mrs Capaan's property at 34 Annersley Avenue Stanwell Tops, which I take to be their home.

Proceedings were next commenced by the bank by summons filed on 19 September 1993. The summons alleged that the bank was entitled, in law, to an order that Mr and Mrs Capaan give the bank possession of their property. The claim for possession was based on the established default by Mr and Mrs Capaan under the mortgage signified in the judgment.

THE JUDGMENT DEBTOR BY MOTION COMMENCES CONTEMPT PROCEEDINGS

On 8 March 1994 Mr Capaan, seemingly on behalf of himself and his wife, filed notices of motion in the Supreme Court. He sought orders for the institution of contempt proceedings against a number of persons. The persons named in the successive motions were senior officers or agents of the bank (namely, its managing director, the bank's solicitor and the bank's counsel), Master Greenwood and Prothonotary Whalan.

This Court has not been concerned with the substance of the contempt alleged although, for the bank, it was complained that no sufficient particulars had ever been provided by Mr Capaan to support his allegations of contempt. We have not explored that matter.

Following an initiative of some of the persons charged, the proceedings came before Ireland J. His Honour, for short reasons published on 15 March 1994, ordered that the notice of motion for contempt should be dismissed. He also ordered Mr and Mrs Capaan to pay the costs of the parties who had sought the dismissal of the proceedings. He did so on the ground that the proceedings were misconceived. Mr Capaan is before the Court today to seek leave to appeal against that order of dismissal.

The basis of the finding that the proceedings were misconceived lay in the way in which the proceedings had been commenced by Mr Capaan. In the notice of motion which was filed by him he said:

The defendant will at 10 am on 14 March 1994 in the Supreme Court Sydney Registry move the court to orders:

1. that the court make such orders to institute contempt proceedings for contempt in the face of hearing in the court

2. that the court make such orders to institute contempt proceedings for contempt outside the court."

I do not pause to consider the jurisdiction of a single judge to deal with cases of contempt of the kind secondly charged by Mr Capaan. The authority of this Court suggests that charges such as those contemplated by Mr Capaan in para2

at least are, by the Supreme Court Act 1970, s48(2)(i) and s48(4)(a) referred to the Court of Appeal and may not be dealt with by a single judge. See Registrar, Court of Appeal v Collins [1982] 1 NSWLR 682 (CA); Fraser v The Queen [1984] 3 NSWLR 212 (CA); Registrar of the Court of Appeal v Maniam [No 1] (1991) 25 NSWLR 459 (CA).

It is sufficient to deal with Mr Capaan's proceedings on the basis of the first prayer in his motion which, like the second, was in terms an application for the Court to institute contempt proceedings of its own. The motion did not purport to be, nor has it to this day been asserted to be, a contention by Mr Capaan, himself and/or his wife, that the alleged contempt should be punished in

WRPAAN v JOSS, MANAGING DIRECTOR, WESTPAC [No 2]; CAPAAN v WESTPAG SAVINGS BANK LTD [No 2] (Kirby P)

proceedings brought in his own name or by them in their names. On the contrary, from the first to the last, the application has been one for the Court to institute its own proceedings.

The Court may initiate proceedings for contempt. It may do so pursuant to the powers expressed, inter alia, in Pt55 R11 of the Supreme Court Rules. That rule provides:

"11 (1) Where it is alleged, or appears to be the Court on its own view, that a person is guilty of contempt of the Court or of any other court, the Court may, by order, direct the registrar to apply by motion for, or to commence proceedings for, punishment of the contempt.

(2) SubR(1) does not affect such right as any person other than the registrar may have lo apply by motion for, or to commence proceedings for punishment of contempt. "

CONTEMPT PROCEEDINGS MAY NOT BE INITIATED BY MOTION

It is fair to Mr Capaan to say that a first reading of the foregoing rule would suggest, particularly to a person unfamiliar with the authority of Court, that it might be possible for a person, by motion, to move the Court to proceed to defend its process by the commencement of proceedings on its own. Such a view of the rules would not be dissimilar to the view which I took of the provisions of s475 of the Crimes Act 1900 in Varley v The Attorney General in and for the Stale of New South Wales (1987) 8 NSWLR 30 (CA), 36f. However, I was in dissent there. Hope JA and Samuels JA were of the view that proceedings under that section of the Act were ministerial and could not be proceeded with by formal judicial proceedings, such as a motion. They were to be dealt with by the Court exercising its powers administratively.

The same view was earlier taken by this Court of the immediately applicable tule, viz PtS5 R11 SCR. It was taken by a unanimous court in 1983 in Killen and Ors v Lane and Anor [1983] 1 NSWLR 171 (CA). That decision has now stood for more than a decade. It is a decision which has frequently been followed. It lays down a procedure which is not irrational, nor is it unfair. It is not unfair because there is an alternative procedure available to a would-be prosecutor. It may commence its own proceedings. Of course, it then does so at its own risk. The party is then subject to the risk that costs will be ordered against it. The party is also at risk, arguably, that proceedings may be commenced against it if it can be shown that the contempt proceedings (being criminal in nature) have been brought maliciously or for an improper purpose.

That is therefore the procedure which was - and for that matter still is - available to Mr and Mrs Capaan to prosecute any contention that they may have that a contempt of the court has occurred. They may prosecute the alleged contempt in their own name. That an ordinary litigant may move the Court in that way is expressly reserved by Pt55 R11(2) SCR. The extent of the entitlement to do so has been made clear in a series of decisions in this Court including European Asian Bank AG v Wentworth and Ors (1986) 5 NSWLR 445 (CA), 460 and Ainsworth v Hanrahan (1991) 25 NSWLR 155 (CA).

By saying this I do not wish to encourage Mr and Mrs Capaan to commence such proceedings. They would then run a gauntlet similar to that which the bank initiated in this case, namely an assertion by the opponents that such proceedings were misconceived, frivolous, vexatious or such that they should not be heard.

Killen and Ors v lane and Anor is fully supported as a unanimous decision of this Court which has stood for ten years. The availability of the alternative procedure removes any contention that the decision is an unfair one or that it

unfairly deprives a party, which has a proper grievance, from bringing a charge of contempt before the court if it chooses to do so.

THE ESTABLISHED AUTHORITY OF THE COURT SHOULD BE FOLLOWED

Mr Capaan complains about the decision in Killen and Ors v Lane and Anor. I will concede that there would, in my view, have been an alternative construction of the rule. However, it is not the construction of the rule which was accepted by this Court ten years ago. There is a good reason for the Court's adhering to the decision in Killen and Ors v Lane and Anor. It is this. The law of contempt is, as is so often said, criminal in nature. It is therefore highly desirable that the law, and the procedures to institute such proceedings, should be as clear as possible. The decision in Killen and Ors v Lane and Anor makes the procedure relevantly clear. Leave would be required to argue that the decision was wrong. No real basis for the Court's so holding has been submitted. I would therefore affirm Killen and Ors v Lane and Anor. I would follow it in this case. Its application to this case is fatal to the proceedings brought by Mr and Mrs Capaan. Ireland J correctly so decided. The proceedings were therefore correctly terminated. The summons for leave to appeal against his Honour's orders should therefore be dismissed.

Mr Capaan complained about various other matters relating to his relationship with the bank and the Court. Those matters, in so far as they concerned the bank, would more properly be the subject of appeals against the judgments entered against Mr Capaan and his wife or an application for leave to appeal out of time. As I have said no such appeals have ever been brought against the substantive judgments. Alternatively, they may be the subject of applications for review of what has occurred directed to the Banking Ombudsman. A further possibility, as Ihave already now twice said, is the commencement of contempt proceedings by Mr Capaan, in his own name, and taking the risks to which I have referred.

In saying all this I do not leave out of account the possibility that occasions may arise where a litigant proceeds mistakenly and commences proceedings by way of motion (believing that to be an appropriate way to bring matters of contempt to the attention of the Court) and the Court, looking at the motion, incidentally considers, of its own view, that a contempt has occurred and therefore ministerially initiates proceedings. Approaching the matter in that way, I would not, on the face of the documents now before this Court, believe that the allegations require that the decision of Ireland J be set aside and proceedings for contempt be initiated by the Court.

COMPLAINT OF FAILURE TO RESPOND TO A LETTER TO REGISTER

Mr Capaan also complained that Ireland J suggested to him that he should write a letter to the Registrar. This would be a correct procedure to bring to the notice of the Court the alleged contempt for consideration by the Court. The Court could then, ministerially and of its own motion, commence proceedings for contempt of court, if it so determined. The procedures of the Court in this regard are now well settled. Upon the receipt of any such suggestion, if it appears that there may be substance in it, it is referred by the Court to the Registrar. The Registrar then takes advice from the Crown Solicitor. If so advised, the Registrar would, after consideration of such opinion, determine whether proceedings should be brought. If so, he would then bring such proceedings. They would be prosecuted in the Court. In this way, the Court avoids, as far as possible, the risk of being both prosecutor and judge in contempt proceedings.

WRPAAN v JOSS, MANAGING DIRECTOR, WESTPAC [No 2]; CAPAAN v WESTPAG SAVINGS BANK LTD [No 2] (Handley JA)

Mr Capaan says that a letter which he subsequently wrote to the Registrar about his complaints was not answered. If this is so, that is an administrative slip. It is regretted. I consider that Mr Capaan was entitled to have an answer to his letter. I will check administratively as to why no answer was sent to him. Every citizen has a right to courtesy from the Court and its officers. Letters written to the Court should, within reason, be answered, in particular where a formal complaint of contempt is being made to the Registrar. Of course, I reach no conclusion on the accuracy or fairness of Mr Capaan's complaint. The Court has not heard the Registrar. For all I know the Registrar may not have received Mr Capaan's letter.

In any case, the failure to provide an answer and any lack of courtesy would not, in any way, salvage the proceedings which Mr Capaan commenced by notice of motion. Those proceedings were misconceived. They were rightly dismissed by Ireland J.

I have taken some considerable time to explain the reasons for the conclusion which I have reached because of the strong feelings which Mr Capaan has voiced in court, and because he appears before us today unrepresented. However, as I have explained, this Court must conform to the law. Doing so, I am of the view that Mr Capaan's summons for leave to appeal should be dismissed. He must pay the costs of the summons.