Corry v NHB Enterprises Pty Ltd

Solicitors: Complete Legal & Conveyancing (First Appellant) HWL Ebsworth Lawyers (Respondents) File Number(s): 2022/49292 Publication restriction: Nil Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Equity Citation: [2021] NSWSC 741; [2022] NSWSC 97 Date of Decision: 24 June 2021; 11 February 2022 Before: Bell P File Number(s): 2019/54125

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

HEADNOTE [This headnote is not to be read as part of the judgment] Having found that the appellant had committed three contempts of court, the primary judge imposed as punishment a term of 3 months' imprisonment. The appellant challenges his Honour's discretionary decision to impose that punishment. He seeks to have further evidence admitted on the appeal and argues that upon the receipt of that evidence the Court of Appeal should re-exercise the sentencing discretion and, in doing so, impose a suspended term of imprisonment. The further evidence was a psychiatrist's report, which was not before the primary judge. That report was tendered to support three findings of fact. Those findings are: (1) that the appellant had been diagnosed with a "chronic and severe Adjustment Disorder with Depressed Mood"; (2) that his father was a magistrate; and (3) that any period of imprisonment will "add further" to Mr Corry's vulnerable mental health condition and could precipitate a major depressive illness. The dispositive issue in the appeal is whether the report should be received in evidence pursuant to s 75A(7) of the Supreme Court Act 1970 (NSW). The Court (Meagher JA, Leeming and White JJA agreeing) dismissed the appeal, holding:

1. Appeals under s 75A are by way of rehearing. Where further evidence is admitted in an appeal concerning the exercise of a discretion, the appellate power of this Court to substitute its exercise of the discretion for that of the court below is exercisable if the appellant can demonstrate that the order the subject of the appeal is the result of some "legal, factual or discretionary error": Meagher JA at [14], [22]; Leeming JA at [38]; White JA at [39]. CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 67; Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40, considered.
2. As the further evidence is based on matters which occurred prior to the hearing before the primary judge, s 75A(8) is engaged. This requires that the Court be satisfied there are "special grounds" for receiving the further evidence. A relevant consideration is whether there is a high degree of probability that if the evidence is admitted error will be established and a different order made: Meagher JA at [17]-[22]; Leeming JA at [38]; White JA at [39]. Akins v National Australia Bank (1994) 34 NSWLR 155; Ladd v Marshall [1954] 1 WLR 1489; Searle v Commonwealth (2019) 100 NSWLR 55; [2019] NSWCA 127; Phoenix Commercial Enterprises Pty Ltd v City of Canada Bay Council [2010] NSWCA 64; Khoury v R [2011] NSWCCA 118, considered.
3. For the appeal to succeed, the appellant must establish an error, which would justify the re-exercise of the punishment discretion. However, the appellant does not contend that in the proper exercise of the penalty discretion the introduction of the further evidence must have resulted in a different outcome before the primary judge. His case is that the primary judge (and this Court) might have exercised (or exercise) the discretion differently with the benefit of the further evidence. If the position is only that the introduction of the evidence may have resulted in a different outcome, it cannot be said that the orders appealed from are the result of some factual or discretionary error. It follows that the application that the Court receive further evidence must be refused: Meagher JA at [22]-[26]; Leeming JA at [38]; White JA at [39].

JUDGMENT

1. MEAGHER JA: This is an appeal under Supreme Court Act 1970 (NSW), s 101(5) against a penalty imposed for contempts of court. Having found the appellant (Mr Corry) committed three of the four charged contempts (NHB Enterprises Pty Ltd v Corry (No 7) [2021] NSWSC 741), the primary judge committed him to 3 months in prison on each of the first and second charges and on the fourth charge to a term of 2 months, with each of these terms of imprisonment to be served concurrently (NHB Enterprises Pty Ltd v Corry (No 8) [2022] NSWSC 97). In the same proceedings, the primary judge dealt with a charge of contempt against Mr Corry's wife, which is not the subject of the appeal to this Court.

The ground of appeal

1. Having imposed these penalties on Mr Corry, in the exercise of the Court's discretionary power confirmed by Supreme Court Rules 1970 (NSW), Pt 55 r 13 the primary judge on 11 February 2022 made orders for the issue of a warrant for his committal and for that warrant to be executed forthwith (orders 4 and 5). His Honour stayed the execution of those orders pending the determination of Mr and Mrs Corry's foreshadowed appeal against the findings of contempt made against each of them (order 8).
2. The Notice of Appeal filed on 9 May 2022 challenged the declarations that each of Mr and Mrs Corry was in contempt. It also challenged the punishment imposed for those contempts. Following a series of directions hearings and an unsuccessful application seeking access to documents and computer devices (Corry v NHB Enterprises Pty Ltd [2022] NSWCA 280), on 1 February 2023, Mr and Mrs Corry's appeals were set down for hearing commencing on 27 June 2023.
3. On 20 March 2023, Mrs Corry's appeal was abandoned and the focus of Mr Corry's appeal changed significantly. An Amended Notice of Appeal was filed, naming only Mr Corry as appellant and challenging only the penalty decision and on the following grounds: 1. In light of the further evidence provided to the Court, pursuant to s 75A(8) of the Supreme Court Act 1970, the Court should re-exercise the sentencing discretion afresh. 2. In the alternative, the learned Judge at first instance erred by: a. Failing to appropriately consider the question of suspension of the sentence. b. Failing to provide adequate reasons as to why the 3-month term of imprisonment should not be suspended.
4. In support of ground 1, by a Notice of Motion filed on 17 March 2023, Mr Corry sought an order that the report of Mr Sam Borenstein, a clinical psychologist, dated 23 February 2023 be admitted into evidence pursuant to s 75A(7) of the Supreme Court Act.
5. On 26 June 2023, Mr Corry by his lawyer advised the Registrar that ground 2 of the Amended Notice of Appeal was not pressed.

The punishment imposed

1. The subject matter of Mr Corry's appeal is the primary judge's discretionary judgment committing him to custody for a term of 3 months. The three contempts charged and found were:

Charge 1 "in wilful disobedience and contravention of the Consent Orders of April 2018, Mr Corry retained the PK Software and the Vivaldi Database in his possession, custody or control; retained documents which were created using the PK Software and the Vivaldi Database in his possession, custody or control; and retained hard copies of documents comprising or containing the listed things and/or confidential information" (Corry (No 8) at [19(1)]). The primary judge was "satisfied beyond reasonable doubt that [this] charge was sustained. There was a significant body of information and documents derived from the PK Software and the Vivaldi Database located both physically and electronically, on Mr Corry's devices, which were retained in disregard of both the First Settlement Deed and the Consent Orders" (Corry (No 8) at [21], summarising Corry (No 7) at [258]-[281]).

Charge 2 "in wilful disobedience and contravention of the Consent Orders, Mr Corry accessed, downloaded, transferred, interfered with, disclosed, copied, exploited and/or otherwise used the Confidential Information owned by the Applicant" (Corry (No 8) at [19(2)]). The primary judge "held that Mr Corry continued to make use of the PK Software and the data stored on it in the ongoing business of NexGen, in direct competition with NHB Enterprises" (Corry (No 8) at [22], summarising Corry (No 7) at [282]-[306]).

Charge 4 "Mr Corry breached and frustrated the Second Search Order through the interruption of the download of the Dynamics Account" (Corry (No 8) at [19(4)]). The primary judge "held that the inference was inescapable that it was Mr Corry who caused the password to be changed for the Dynamics Account, with the intention of frustrating the search process being conducted by the Independent Computer Expert" (Corry (No 8) at [24], summarising Corry (No 7) at [321]-[336]).

Appeal by way of rehearing

1. The standard of appellate review applicable to the determination of that punishment is as stated in House v The King (1936) 55 CLR 499; [1936] HCA 40. It must be shown that there has been some error in the exercise of the discretion, which will be the case if the judge "acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration"; or if upon the facts the determination is "unreasonable or plainly unjust" so as to justify an inference that there has been a failure properly to exercise the discretion (at 504-505).
2. The contempt proceedings which were commenced by the respondents' Notice of Motion of 14 August 2019 engaged the civil jurisdiction of the Supreme Court (Hinch v Attorney-General for the State of Victoria (1987) 164 CLR 15 at 89; [1987] HCA 56; Witham v Holloway (1995) 183 CLR 525 at 534, 549; [1995] HCA 3; Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd (2015) 256 CLR 375; [2015] HCA 21 at [35]). The right to appeal from the declarations as to the contempts and from the determination of punishment is conferred by s 101(5) of the Supreme Court Act, and leave to appeal is not required (Prothonotary of the Supreme Court of New South Wales v Dangerfield [2016] NSWCA 277 at [6]-[10]; Dowling v Prothonotary of the Supreme Court of New South Wales (2018) 99 NSWLR 229; [2018] NSWCA 340 at [7]-[9]).
3. That appeal is governed by s 75A of the Act, which relevantly provides: 75A Appeal (1) Subject to subsections (2) and (3), this section applies to an appeal to the Court and to an appeal in proceedings in the Court. … (5) Where the decision or other matter under appeal has been given after a hearing, the appeal shall be by way of rehearing. … (7) The Court may receive further evidence. (8) Notwithstanding subsection (7), where the appeal is from a judgment after a trial or hearing on the merits, the Court shall not receive further evidence except on special grounds. (9) Subsection (8) does not apply to evidence concerning matters occurring after the trial or hearing. …
4. The hearing before the primary judge was a hearing on the merits.
5. Where the appellant seeks to adduce further evidence on appeal, the difference between the correction of error on an appeal in the strict sense and the correction of error on an appeal by way of rehearing is significant, as also is the difference between the latter and a hearing de novo.
6. In an appeal in the strict sense, there is no opportunity to lead further evidence and the correctness of the judgment under appeal is determined at the time that judgment was given, and accordingly on the evidence adduced at the trial and on the law as it then stood. In contrast, an appellate court determining an appeal by way of rehearing does so at the time of that hearing, on the evidence adduced at the trial supplemented by any further evidence that may be received, and on the law as it stands when the court gives judgment on the appeal (see Quilter v Mapleson (1882) 9 QBD 672 at 675-676; CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 67 at [111]; Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40 at [23]; Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 32 at [27]; Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30 at [31]).
7. In the case of an appeal by way of rehearing (in contrast to a hearing de novo), where further evidence is admitted the powers of the appellate court are exercisable if that evidence "would demonstrate that the order under appeal is erroneous" (CDJ v VAJ at [109]); or, as was said in Allesch v Maunz at [23], if the appellant can demonstrate that the order the subject of the appeal is the result of some "legal, factual or discretionary error" (emphasis added). As was observed in CDJ v VAJ at [111] with respect to a provision conferring on an appellate court a discretion to receive further evidence, such a provision should not be construed in a way "that would have the practical effect of obliterating the distinction between original and appellate jurisdiction". Section 75A does not contain any provision indicating that the appellate jurisdiction conferred on this Court may be exercised whether or not there was error at first instance (see Allesch v Maunz at [23]).

The further evidence

1. It is convenient at this point to introduce the evidence and narrow argument in Mr Corry's appeal.
2. Mr Borenstein's report was prepared following his audio-visual interview of Mr Corry on 22 February 2023. Three findings of fact, none made or taken into account by the primary judge, are sought to be proved by the tender of this report in the appeal. They are: (1) that "Mr Corry's diagnosis is that of a chronic and severe Adjustment Disorder with Depressed Mood (DSM V code 309.0)"; (2) that "Mr Corry's father, aged 68, works as a Magistrate"; and (3) that any period of imprisonment will "add further to Mr Corry's vulnerable mental health and could precipitate a major depressive illness, warranting more intensive psychiatric and psychological treatment". The second of these facts is not contested. The first and third are opinions as to Mr Corry's mental health, and its possible consequences, the admissibility and probative value of which are contested.

Disposition of the appeal

1. The first question is whether Mr Borenstein's report should be received in evidence. As it concerns Mr Corry's mental health and is principally based on matters which occurred prior to the hearing before the primary judge, s 75A(8) is engaged. That is not contested. That subsection requires the Court be satisfied that there are "special grounds" for receiving the evidence directed to establishing those facts.
2. In Akins v National Australia Bank (1994) 34 NSWLR 155, Clarke JA (at 160), adopting the language of Denning LJ in Ladd v Marshall [1954] 1 WLR 1489 at 1491, set out the "well-understood general principles" by reference to which a determination should be made concerning the admission of further evidence on appeal: These principles require that, in general, three conditions need be met before fresh evidence can be admitted. These are: (1) It must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; (2) The evidence must be such that there must be a high degree of probability that there would be a different verdict; (3) The evidence must be credible.
3. Subsequent decisions dealing with applications for the admission for fresh evidence have frequently cited this passage in Akins, and these considerations are treated as "principles which have been developed in the case law to guide the formulation of the judgment for which s 75A(8) provides" (Searle v Commonwealth (2019) 100 NSWLR 55; [2019] NSWCA 127 at [170]-[175], citing Spigelman CJ in Phoenix Commercial Enterprises Pty Ltd v City of Canada Bay Council [2010] NSWCA 64 at [11]).
4. Each of these matters is directed ultimately to weighing the interests of justice as between the parties, and reconciling those interests with the public interest in achieving finality to litigation (see Brown v Dean [1910] AC 373 at 374; Searle at [171], [172], citing McCann v Parsons (1954) 93 CLR 418 at 430-431; [1954] HCA 70). In CDJ v VAJ, the plurality observed at [104] that in a case which does not involve the interests of third parties "factors such as finality, discoverability of the evidence and its likely effect on the orders made are usually relevant to the exercise of the discretion".
5. Similar considerations arise on an application to tender fresh evidence in an appeal against sentence under Criminal Appeal Act 1912 (NSW), s 5(1)(c), as the observations of Simpson J (as her Honour then was) show in Khoury v R [2011] NSWCCA 118 at [104]-[110]; (2011) 209 A Crim R 509. Those considerations include whether there has been an error in the sentencing process (limited to a consideration of the factual position at the time of sentencing), or in the outcome of the sentencing process, that is the occasion of an injustice which ought be remedied and whether in such circumstances the requirement for finality should nevertheless prevail. In such an appeal, the precondition in s 6(3) of the Criminal Appeal Act to the exercise of the power to quash the sentence applies. For that condition to be satisfied, the Court must form the opinion that "some other sentence, whether more or less severe is warranted in law and should have been passed".
6. The second of the "three conditions" in Akins directs attention to the probability that there would be a different outcome in the appeal if the evidence is admitted. For Mr Corry's appeal to succeed, he must establish that the primary judge's punishment orders are the result of error because, in the proper exercise of the discretion to punish, with the benefit of those findings, his Honour must have imposed a different and lesser punishment; in other words, that the further evidence if accepted would "demonstrate that the order under appeal is erroneous". Accordingly, it is not sufficient that in the proper exercise of that discretion the primary judge would have taken the three additional matters into account as material. That alone could not establish that the challenged orders are the result of some factual or discretionary error.
7. No challenge is made to any of the findings of fact of the primary judge made in the judgment on penalty. Nor is it suggested that there was any other House v The King error on the part of the primary judge in imposing a penalty of imprisonment for a period of 3 months, structured as it was in respect of the three proven charges. In relation to the possible or likely outcome of any fresh exercise of the discretion with the benefit of the additional findings, Mr Corry's position is that they "could make a dispositive difference".
8. The following exchange in argument records Mr Corry's position: WHITE JA: As I understand it and correct me if I'm wrong, your position is that if Mr Borenstein's report had been before the primary judge and his Honour nonetheless came to the same sentence and a three-month term of imprisonment was made, that would not, in itself, demonstrate error on the part of the primary judge? CHHABRA: That is so but, had that evidence been before his Honour, it may have been a compelling reason to suspend on terms.
9. As the foregoing analysis shows and as the respondents submit, that this Court might exercise the discretion differently with the benefit of the further evidence would not of itself establish that the primary judge's penalty orders were the result of any error. To proceed otherwise is to ignore the requirement for error inherent in the unqualified conferral of the right to an appeal by way of rehearing, and thereby to treat such an appeal with the benefit of fresh evidence as equivalent to a hearing de novo (CDJ v VAJ at [109], [111]).
10. It follows that Mr Corry's application under s 75A(7) that the Court receive further evidence must be refused because taking Mr Corry's case at its highest, that evidence is not capable of establishing any relevant error. In the absence of that evidence, it is not contended that there was any error on the part of the primary judge.
11. For that reason the appeal must be dismissed.
12. Before turning to the orders to be made, I should state briefly why Mr Corry's concession as made by counsel in the exchange with White JA at [24] above was undoubtedly correct.
13. Mr Borenstein's report was tendered to establish three additional facts. Those facts were relied on in support of the imposition of a suspended custodial period of 3 months on condition that Mr Corry engage in community service and undertake ongoing mental health care treatment.
14. It is convenient first to consider the significance of Mr Corry's father's occupation. It is said that by reason of that fact there is a "chance" Mr Corry might end up in some form of segregated or protective custody involving more onerous conditions. However, the evidence does not enable any meaningful assessment of the need for, or likelihood of, that coming to pass. Nor does it permit any judgment as to whether in that event any such custody or segregation would involve sufficiently different and more onerous conditions as to call for a lesser or suspended period in custody. It follows that this fact alone would not have justified a departure from the primary judge's conclusions that Mr Corry's conduct "amounted to a serious contempt and warrants nothing less than a custodial sentence", that conduct being of a "deliberate and contumacious character" (Corry (No 8) at [70], [82]); and that there was no "proper basis to suspend the sentence" (Corry (No 8) at [85]).
15. The remaining two related opinions are those of Mr Borenstein, whose diagnosis is that Mr Corry has a chronic and severe Adjustment Disorder with Depressed Mood. His report otherwise records that Mr Corry has no indication of any serious psychiatric disorder, that his thoughts and their form and contents are normal, and that there is no indication of any perceptual disturbance. He also records that Mr Corry presented as "cognitively intact". One of the tests Mr Borenstein administered records that Mr Corry had "moderate" symptoms of anxiety and of stress, and that, according to Mr Corry's self-report, he had struggled with symptoms of depression and anxiety since legal proceedings were first commenced by NHB in June 2017.
16. Mr Borenstein's statement that any period of imprisonment will "add further" to Mr Corry's vulnerable mental health and "could precipitate a major depressive illness" is unaccompanied by any discussion addressing the following matters: (1) the practical consequences for Mr Corry of his existing mental condition, taking into account that the symptoms of the condition commenced in June 2017 and that since December 2022 he has been employed as a compound chemist and has also owned and operated a "Super Pharmacy company"; (2) the assumptions made as to the nature of the conditions in which Mr Corry might be held whilst in custody; (3) what it is about imprisonment and those conditions which might "add further" to his vulnerable mental state and which "could" precipitate a major depressive illness; (4) whether there are any other factors which might influence, favourably or unfavourably, the possibility of that outcome; and (5) whether the adverse effect of any of those factors might be mitigated by changes to his conditions of custody or treatment received whilst in custody.
17. There are also serious questions as to the reliability of Mr Borenstein's underlying opinions which are substantially based on Mr Corry's self-reported symptoms given in a single audio-visual interview. At the time of that interview, Mr Borenstein did not have any detailed instructions as to Mr Corry's conduct or the benefit of the primary judge's findings as to the circumstances of his contempts (Corry (No 7) at [258]-[306], [321]-[336]), as to the credibility and reliability of his evidence purporting to explain his conduct (Corry (No 8) esp at [49]-[68]), or as to his explanations for that conduct, which the primary judge found to undermine the force of the apology "he purported to proffer to the Court" and his purported acceptance of the Court's findings (Corry (No 8) at [71]-[77]).
18. In these circumstances, it would be well open to a court not to be satisfied that the risk of a deterioration in Mr Corry's mental health, should he be subjected to a period of up to 3 months in custody and irrespective of the conditions of that custody and of the treatment he might receive, is such as would require in the proper exercise of the discretion that there be a suspension of his time in custody for all or part of that period.
19. Finally, in committing him to a period in custody, the Court's power, as confirmed by Supreme Court Rules 1970 Pt 55 r 14, extends to ordering a contemnor's discharge from custody "before the expiry of the term", including for circumstances that have arisen after the punishment has been imposed and commenced (see Young v Registrar, Court of Appeal (No 3) (1993) 32 NSWLR 262 at 281-283, 292; Menzies v Paccar Financial Pty Ltd [2016] NSWCA 280 at [16]-[20]). The existence of this power and the opportunity for its exercise in the event that Mr Corry's circumstances change during his time in custody is an additional factor which might be weighed against the making of an order at the outset that some or all of his time in custody be suspended.

Conclusion

1. Taking account of the abandonment of Mrs Corry's appeal by the filing of the Amended Notice of Appeal, the following orders should be made: 1. Dismiss the first appellant Mr Corry's Notice of Motion filed 17 March 2023 seeking the admission of Mr Borenstein's report as evidence in the appeal. 2. Dismiss the first appellant's Amended Notice of Appeal filed 20 March 2023. 3. Order the first appellant pay the respondents' costs of the appeal, including the costs of that Motion. 4. Dismiss the appeal made by Boriana Corry as second appellant in the Notice of Appeal filed 9 May 2022 with costs.
2. The effect of the dismissal of Mr Corry's appeal will be to discharge the stay of orders 4, 5 and 6 made by the primary judge on 11 February 2022. In the course of argument in this Court, it was acknowledged on behalf of Mr Corry that the consequence of orders 4 and 5 becoming effective is that the warrant for his committal to prison will be issued and executed forthwith.
3. LEEMING JA: I agree with Meagher JA.
4. WHITE JA: I agree with Meagher JA.

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. Decision last updated: 12 October 2023