By way of a notice of motion of 10 December 2015, Mr Darren Challis has brought proceedings for contempt of court against DHR International Inc (DHR). The prosecution arises in the context of a civil dispute between DHR and Mr Challis. In the substantive proceedings, DHR is the plaintiff and Mr Challis is the defendant. For ease of comprehension, I shall refer in this judgment to Mr Challis as "the prosecutor", and to DHR as "the defendant".
For convenience, I shall refer to the notice of motion as "the charge document". It provides particulars, in that the contempt was said to have been committed by the sending by the defendant of four letters to a third party, each of them signed by the principal of the defendant, Mr David Hoffman.
The first letter was dated 26 October 2015. Its addressee was Mr Ulrich Dade, Chairman of the Advisory Board of The Amrop Partnership SCRL ("Amrop").
The second letter was dated 27 October 2015. Its addressee was also Mr Ulrich Dade of Amrop.
The third letter was dated 29 October 2015. Its addressee was again Mr Ulrich Dade of Amrop.
The fourth and final letter was dated 4 November 2015. Its addressee was Mr José Leyún, the CEO and Chairman of the Board of Amrop.
At the commencement of the hearing before me, counsel for the prosecutor applied to amend the charge document in order to delete an allegation that Mr Hoffman was also personally guilty of contempt, by way of the principles of accessorial liability. As a result of that application, I dismissed the charge of contempt against Mr Hoffman, and reserved the question of his costs.
Chronological background
The following thumbnail sketch is derived from the evidence placed before me at the hearing.
On or about 24 June 2010, the prosecutor was appointed Managing Director of DHR Australia, an Australian subsidiary of the defendant. The defendant operates a global executive search and recruitment business from various locations, and through various subsidiaries, around the world.
On or about 13 November 2012, the prosecutor ceased to be a director of DHR Australia.
Commencing in 2014, a web log (more commonly referred to as a blog) was established through numerous websites. It contained material highly critical of the defendant and its directors. At the time of the hearing of the motion before me, it was not disputed that the prosecutor was the publisher of the blog.
The defendant took legal action to have the blog taken down. In this Court, it sought interlocutory injunctive relief against the prosecutor in order to prevent public access to the blog until the conclusion of a final hearing on the merits, and to prevent the further publication of allegedly false statements. That injunction was refused by White J, in a decision of 23 October 2015: DHR International, Inc a company incorporated in Delaware in the United States of America v Challis [2015] NSWSC 1567.
Subsequently, Mr Hoffman, who is the current Chairman of the defendant, sent four letters to Amrop on the letterhead of the defendant. Amrop is an executive search company based in Belgium that establishes a commercial partnership with "member firms" internationally. As I have said, the letters were dated 26 October 2015, 27 October 2015, 29 October 2015 and 4 November 2015, and are the basis of the allegation of contempt.
On 13 November 2015, the defendant commenced proceedings against the prosecutor in the Supreme Court of New South Wales seeking a permanent injunction restraining the prosecutor from publishing or continuing to publish allegedly false statements regarding the defendant, along with damages.
I was informed of the following from the Bar table by counsel for the defendant, without demur by counsel for the prosecutor. A further application seeking interlocutory relief, similar to that made before White J, was made before Adams J as Duty Judge on 12 November 2015 and 13 November 2015. Although leave was granted to file material in court, his Honour referred the matter to the Registrar's list. By consent of the parties, on 3 December 2015 the Registrar stood over the second interlocutory matter until final hearing; consequently, this motion has not been heard.
On 27 November 2015, separate proceedings were commenced in this Court by Mr Hoffman personally against the prosecutor, seeking damages, and seeking to have the blog taken down.
In a decision of Adamson J of 18 December 2015, various orders were made concerning discovery and the provision of reports in relation to the substantive civil proceedings between the defendant and the prosecutor: DHR International, Inc v Challis (No 2) [2015] NSWSC 1964.
Matters not in dispute
The following legal and evidential matters were not in dispute between the parties before me.
First, the proceedings before me were a summary criminal prosecution. Accordingly, all of the aspects of such a proceeding needed to be observed strictly. Amongst them were the need for the elements of the offence to be proven beyond reasonable doubt; the fact that the defendant enjoyed a right to silence; the fact that no inference could be drawn against the defendant if it did not go into evidence; and the need for strict compliance with the rules of evidence if objection were taken by either party.
Secondly, the prosecutor had standing to bring the charge against the defendant.
Thirdly, in order to make out the offence in the circumstances of this case, the prosecutor needed to establish beyond reasonable doubt that, by sending one or more of the four letters to Amrop, the defendant had improperly sought to cause Amrop to apply pressure to the prosecutor to consent to the orders sought by the defendant in the substantive proceedings against the prosecutor: see generally Attorney-General v Times Newspapers Ltd [1974] AC 273 at 283.
Fourthly, although the letters in question were sent from an address in Chicago, Illinois, within the United States of America, to addresses in the nations of Belgium and Spain, nevertheless there was sufficient nexus between the alleged offence and New South Wales for this Court to have jurisdiction with regard to its prosecution. I understood that concession on the part of the defendant to be founded upon Pt 1A of the Crimes Act 1900 (NSW) (which is expressed to apply to all offences), and also upon the fact that the defendant has accepted the jurisdiction of the New South Wales Supreme Court by way of commencing the proceedings in the substantive matter.
Fifthly, the business name "Amrop Challis & Company" was registered on 4 April 2015 by the company Challis & Company Pty Limited (Challis & Company). The latter was incorporated in Australia from 15 November 2012, and the prosecutor is its sole director. The relationship between the prosecutor and Amrop is such that the prosecutor is a managing director of an Amrop "member firm".
Sixthly, at least some of the posts on the blog had been transmitted from the same IP address (in other words, using the same computer hardware) as that used by Challis & Company for its business purposes.
Seventhly, there was a commercial relationship between Amrop and Mr Challis, in light of his position as director of Challis & Company (see transcript of the motion (TM) of 22 February 2016 at 44.25).
Evidence
I proceed to summarise briefly the documentary evidence that was placed before me by the prosecutor.
An agreed bundle of documents was tendered, which became Prosecutor Exhibit A. This bundle was predominantly correspondence between the defendant and Amrop, and included a number of documents.
They included the letter from the defendant to Mr Dade dated 26 October 2015, that being the first letter expressed to be a particular of the contempt charge. Attached to that letter were two documents, the first headed "Global recruitment firm accused of lying, lacking ethics and dishonesty" and the second being a copy of the judgment of White J of 23 October 2015.
In a nutshell, the letter informed Amrop about the existence and nature of the blog; informed Amrop of the investigation that identified the prosecutor as having been involved in it; sought assistance from Amrop in the investigation; sought to confirm Amrop's position with regard to the blog; and explained that the defendant would aggressively pursue all remedies available to the defendant in Australia or the United States if the prosecutor did not remove the attack blog.
The documents also included the letter from the defendant to Mr Dade of 27 October 2015, that being the second letter expressed to be a particular of the contempt charge.
In a nutshell, the letter followed upon the previous correspondence and communications in relation to the blog; explained the facts said to lead to the conclusion that the prosecutor was its author; requested an update on the status of the investigation by Amrop; and stated that, if the blog were taken down immediately, the defendant had no interest in pursuing legal remedies against Amrop.
The documents also included the letter from the defendant to Mr Dade of 29 October 2015, that being the third letter said to be a particular of the contempt charge.
In a nutshell, the letter followed up on the previous correspondence and communications in relation to the blog; provided further support for the allegation that the prosecutor was the author of the blog; and stated that legal remedies would be pursued against Amrop by the defendant if Amrop continued to take no further steps against the prosecutor, and continued to accept the statements of the prosecutor that he was not the author.
The documents also included the letter from the defendant to Mr Leyún of 4 November 2015, that being the fourth letter said to be a particular of the contempt charge. In a nutshell, the letter spoke of potential legal action in Australia by the defendant against Amrop; gave further reasons why one could be satisfied that the prosecutor was the author of the blog; and encouraged Amrop to come to its own opinion in that regard, and not to accept the prosecutor's denials at face value.
The documents also included the covering emails from Gabriela Liberatore, an Executive Assistant within the defendant, for all of the letters that form the basis of the contempt charge, those emails being dated 26 November 2015 at 11.27 am, 28 October 2015 at 10.42 am, and 30 October 2015 at 3.05 am and 4 November 2015 at 3.10 am.
The documents also included a letter from Amrop to the defendant dated 3 November 2015 (this letter was admitted on a basis that I shall shortly explain).
They also included a letter from the defendant to Mr Dade of Amrop of 25 November 2015 (it is to be noted that this letter falls outside the charge period, but was admitted on another basis that I shall shortly explain).
They also included an affidavit of Mr Bryan Webster dated 13 October 2015. Mr Webster is the legal counsel of the defendant in the United States. Annexed to the affidavit are a copy of a blog post of 29 September 2015, and a report from a computer expert retained by the defendant investigating the provenance of that blog.
A second bundle of documents was tendered by the prosecutor, over the objection of the defendant, and became Prosecutor Exhibit B. They included an email sent from Mr Leyún of Amrop to the prosecutor and dated 27 October 2015 at 7.08 pm, and a letter from Mr Leyún of Amrop to the prosecutor dated 10 November 2015. I shall discuss the basis of their admission shortly.
A third bundle of documents tendered by the prosecutor consisted of letters that the defendant or its lawyers sent to Amrop subsequent to sending the four letters that formed the basis of the contempt charge. They included a number of letters from an attorney in the United States for the defendant, Mr Edward Ruberry: to Mr Leyún of Amrop dated 3 December 2015 (attaching various affidavits (including of the prosecutor) and a notice of motion); to Mr José Luis Marcó of Amrop dated 17 December 2015; and, to Mr Marcó of Amrop dated 19 December 2015.
That bundle of documents was admitted over objection as Prosecutor Exhibit C. These documents, and the letter from the defendant to Mr Dade of Amrop of 25 November 2015, was admitted by me only for the purpose of retrospectively shedding light on the state of mind of the defendant at the time of sending the four letters said to found the charge.
The final evidence before me was the affidavit of Mr Michael Sophocles, a lawyer acting for the prosecutor in the proceedings before me, sworn 10 December 2015, and its accompanying exhibit. The paragraphs in the affidavit which were being pressed were refined in oral argument between the parties. In a nutshell, the affidavit formally exhibited a number of court documents, including previous pleadings and judgments, which were relied upon by the prosecutor.
As I have said, over the objection of the defendant, I permitted evidence of the behaviour of the defendant subsequent to the sending of the four letters, but only to cast light on its state of mind at the time of the sending of the letters, and not to demonstrate a tendency on the part of the defendant.
I also permitted, again over objection of the defendant, evidence of the response of Amrop to the letters of the defendant, by way of its replies to the defendant and its communications with the prosecutor, in order to shed some light on the question of the propriety or otherwise of the letters sent by the defendant. In other words, I considered that the response of Amrop to the letters could shed some light upon whether the four letters of the defendant were improper in the surrounding commercial circumstances.
No witnesses gave oral evidence in the case of the prosecutor, and no deponent of any affidavit was required for cross-examination by counsel for the defendant.
The defendant neither tendered nor called evidence.
Submissions of counsel for the prosecutor
The first submission of the prosecutor was that the substantive orders sought by the defendant in the substantive proceedings are not of a nature that this Court would be content to make, for the following reasons. The first order sought is that the blog be taken down in its entirety. Yet, the prosecutor submitted, the defendant does not raise a complaint in respect of the entirety of the blog. The second order sought seeks to restrain permanently the prosecutor from making false statements in relation to the defendant that are intended or likely to cause damage to the business of the defendant. But it was submitted that the proposed order contains an inherent ambiguity that is fatal to its success.
In short it was submitted that the propriety of the four letters must be assessed in the context of the weakness of the substantive claim of the defendant.
Secondly, the prosecutor submitted that there were indeed threats in the letter sent to Amrop, albeit that they were veiled ones. It was said that the correspondence contained repeated implicit threats by the defendant to join Amrop in the litigation between the defendant and the prosecutor unless Amrop took action to persuade the prosecutor to take down the blog.
Thirdly, the prosecutor submitted that the threats had a profound effect, and caused Amrop to impose pressure on the prosecutor to remove the blog in its entirety.
Fourthly, it was said that the conduct of the prosecutor personally in publishing the blog had nothing to do with Amrop, or the relationship between Amrop and Challis & Company (the company, it will be recalled, of which the prosecutor is the principal). That meant, it was said, that it was improper for the defendant to contact Amrop complaining of the conduct of the prosecutor. And it was asserted that the defendant had been, at the least, "wilfully blind" about the true nature of the relationship (or rather, the absence of any relationship) between Amrop and the prosecutor (see TM of 22 February 2016 at 42.5).
Fifthly, it was submitted that the timing of the sending of the letters was important in at least two ways.
First, White J rejected the application of the defendant on 23 October 2015, and the first letter was sent on 26 October 2015. It was said that one could infer that, having been rebuffed by his Honour in open court, the defendant sought to achieve the same result by way of ulterior pressure upon a third party.
Secondly, the letters of 27 October 2015, 29 October 2015 and 4 November 2015 were sent before the application for preliminary discovery was made to Adamson J and granted by her Honour. The prosecutor submitted that the chronology demonstrated that, when the defendant wrote letters to Amrop asserting that there was a relationship between Amrop and the prosecutor, the defendant was improperly making assertions about matters of which it was not truly aware.
Sixthly, the conduct of Mr Ruberry, an attorney of the defendant in the United States, after the sending of the four letters can inform one about the state of mind of the defendant at the time of the alleged contempt, because one can infer that that attorney was acting upon the instructions of his client. It was said that Mr Ruberry had himself behaved improperly, in that he forwarded an affidavit of the prosecutor to Amrop when it had not yet been read in proceedings in this Court. Counsel referred to the well-known principle in Hearne v Street [2008] HCA 36; (2008) 235 CLR 125 that evidence obtained by a lawyer or a party in the course of litigation is not to be used for a secondary purpose.
Seventhly, the prosecutor submitted that pressure was in fact imposed by Amrop upon the prosecutor to force him to capitulate to the demands of the defendant, by Amrop threatening sanctions against him and putting the relationship between Amrop and Challis & Company in question. In other words, whilst the prosecutor accepted that the efficacy of the contempt was not an essential element of its proof against the defendant, nevertheless, it was said, it is noteworthy that it achieved its goal.
In short it was said that the prosecutor had established beyond reasonable doubt that the defendant had improperly attempted to cause a third party, Amrop, to pressure the prosecutor to comply with the forensic demands of the defendant, and that therefore the offence of contempt of court had been made out.
Determination
I do not accept that the prosecutor has established beyond reasonable doubt that the four letters (whether considered individually, or cumulatively) were an improper attempt to cause Amrop to place pressure upon the prosecutor to consent to the orders sought by the defendant in the substantive proceedings: see Harkianakis v Skalkos (1997) 42 NSWLR 22 at 27. I say that for the following reasons.
First, there is nothing to suggest that the defendant did not act with the belief that there was a commercial relationship between Amrop and the prosecutor, pursuant to which Amrop was in some sense the "senior partner" of the business associated with the prosecutor. As it happens, there was evidence before me that it was objectively indeed the case that that relationship existed between Amrop and the entity of which the prosecutor was the principal. But it is the belief of the defendant about that state of affairs at the time of the sending of the letters that I consider to be important to the establishment of impropriety. I do not accept that the defendant sent the letters in the absence of any such belief. Nor do I accept that it was incumbent upon the defendant to draw a fine distinction between the prosecutor personally and the entity of which he was the managing director, and which was a member firm of Amrop, especially in light of the evidence of the use of the IP address of Challis & Company.
Secondly, and speaking more generally, I do not consider it inherently improper for a potential litigant who is in dispute with an individual, or a company closely associated with that individual, to contact the person or entity believed to be the "senior partner" of that individual or company, in order to seek resolution of the dispute.
I therefore do not consider that there was anything inherently improper in the defendant writing to Amrop seeking its involvement in having the prosecutor take down the blog about the defendant.
Thirdly, I accept that, in some circumstances, contact with a third party designed to lead to resolution of a forensic dispute between two parties can be a contempt of court. A hypothetical example that I raised with counsel in discussion is "Tell your husband that if he does not end the litigation against me I will burn the family home down with the two of you and your kids sleeping inside". No-one could deny that such a statement would constitute a contempt. At the other extreme, a statement such as "Please inform your husband that if I succeed in court I will seek full compensation for my legal costs" could hardly be characterised as a contempt. Clearly, much will depend upon the details of what was said and how it was said: see, for example, Clarkson v The Mandarin Club Limited (1998) 90 FCR 354, where it was said (with particular relevance to the circumstances pertaining here) that "It may be accepted that there are various situations in which various kinds of pressure - for example, commercial pressure in a case involving commercial activities - may quite properly be brought to bear on a party with a view to the settlement of litigation".
Fourthly, as for the content and tone of the four letters, it is not necessary for me to provide the entirety of their texts in this judgment. I simply record that I consider that the content and tone of the letters, far from being threatening or abusive or belligerent, is consultative, constructive, and measured.
By way of providing a flavour of the four letters, extracts from the first letter include:
"I am writing to inform you that DHR is currently suing one of your franchisees for creating a secretive and anonymous attack blog that defames both DHR International and my family… We consider this to be of the utmost seriousness and would appreciate your cooperation with our investigation. If Mr. Challis does not remove the attack blog, it is our intent to aggressively pursue all remedies available to us not only in Australia and the United States, but in any other jurisdictions in which defamatory statements were published".
Extracts from the second letter include:
"I believe your representation that Amrop was not in any way involved with the attack blog, which is designed to destroy DHR. It is heartening to learn that such nefarious conduct also goes against Amrop's ethical rules and guidelines and that Amrop would and will not tolerate such conduct by any of its employees or affiliates. I also appreciate that you are taking this issue seriously and that you are committed (i) to working with us to investigate all aspects of the attack blog, which will establish that Amrop was not involved in its publication, and (ii) to remove from public record its defamatory comments, which have cost DHR millions of dollars… I would appreciate if you could call me at your earliest convenience to update me on the status of your investigation. As I said on the phone, if the attack blog is taken down immediately, we have no interest in pursuing further legal remedies against Amrop".
Extracts from the third letter include:
"In the earlier of our conversations, I sought your assistance in persuading Darren Challis, who I understand to be a key figure in Amrop's Australian franchise, from further publishing the attack blog that defames both DHR International and my family. I was pleased to learn that such nefarious conduct goes against Amrop's ethical rules and guidelines, and that Amrop was committed to working with us to investigate all aspects of the attack blog… One basis of DHR's claim is that Mr. Challis' conduct arises out of trade and commerce. Because that conduct advantages Amrop Challis & Company, it gives rise to a cause of action against Amrop for damages. Amrop's failure to take steps to prevent the continued publication of the attack blog renders Amrop complicit in Mr. Challis' conduct and exposes it to suit in the Australian proceedings and elsewhere… In light of the facts I have referenced, however, and the prospect that DHR will seek legal remedy against Amrop, I seek your further consideration of this matter".
Extracts from the fourth letter include:
"I apprehend that Amrop and DHR have shared values of the kind articulated by Mr. Dade to me in our conversations. To that point, my reasons for raising this matter initially with Mr. Dade included affording Amrop the opportunity to de-escalate by encouraging your Mr. Challis to close down his Attack Blog in order to minimize Amrop's exposure to litigation… if Amrop condones or facilitates, or fails to prevent the conduct of its operative, Mr. Challis, then it does so at its own risk for the reasons I have identified. Consequently, I must reserve DHR's rights to claim damages against Amrop in the alternative to the damages it seeks against Mr. Challis'.
To my mind, there is nothing inappropriate or improper about the content or tone of the four letters, whether considered individually or cumulatively.
Fifthly, it is significant that nowhere in the letters does the defendant make an explicit or direct threat against Amrop contingent upon the prosecutor failing to take down the posted material about the defendant.
Sixthly, and again speaking more generally, before and during litigation letters very often pass between potential or confirmed forensic opponents or their lawyers. Those letters are very often a combination of "carrots and sticks". One of countless examples is a letter from a creditor demanding payment of a loan secured by a mortgage, and threatening court action that will culminate in the eviction of the recipient of the letter from his or her home, unless the debt is promptly placed in order. Another commonly encountered example is a letter from one firm of solicitors to another, threatening an application for indemnity costs unless a proposed notice of motion is the subject of agreement.
There is nothing inherently improper about such letters, again subject to their tone and content. To my mind, the letters that found the prosecution are of that unexceptionable character.
Seventhly, it is clear on the evidence that the provenance of the blog was a picture that was slowly being revealed to the defendant: it will be recalled that the defendant felt it necessary to engage a computer expert who undertook some investigations and provided a report about the question of provenance. The communications by the defendant with Amrop need to be assessed in the light of the evidence, and not on the basis that the defendant knew all of the details of what was occurring, and the involvement (if any) of Amrop in those events.
Eighthly, whether or not the substantive claim of the defendant may be too expansive is of little significance in determining whether the letters sent to Amrop were improper. It is the propriety of the letters that is under consideration by me, not the prospects of success of the pleaded substantive claim of the defendant.
Ninthly, to my mind there was nothing in the behaviour of the defendant or its attorney subsequent to the sending of the four letters that suggests that the defendant was acting mala fides at the time when the four letters were sent. In particular, nothing was placed before me to establish that the principle in Hearne v Street is a part of the law of the United States of America.
Tenthly, there was nothing in the letters from Amrop to the defendant or the prosecutor, sent as a result of the receipt of the four letters, to suggest that Amrop took the view that the letters from the defendant to it were improper in any way. That fortifies my own assessment to that effect.
Eleventhly, I draw no sinister inference from the timing of the sending of the letters, both with regard to being after the refusal of the orders sought before White J and before the application for discovery to Adamson J. Having failed in court, there was nothing inherently improper about the defendant contacting Amrop seeking information and assistance. And there was nothing improper about doing so before the picture was able to be completely clarified, including by way of processes of this Court.
In short, I am quite unpersuaded that the prosecutor has established to the criminal standard that the defendant has committed a contempt of court. Rather, I regard the four letters as unremarkable and unexceptionable examples of letters from one company to another seeking resolution of a dispute with a person (correctly) believed to be commercially associated with the recipient company. I shall therefore shortly enter a verdict of acquittal on the charge of contempt.
Costs
I did not invite submissions about costs at the hearing. After its closure, my Associate communicated to the parties that such submissions would be received after delivery of verdict.
I invite counsel for the parties to contact my Associate no later than one week from today to find a mutually convenient time for a very short hearing about costs (including those of Mr Hoffman), unless the question of costs is agreed between them. If there is to be a short hearing, I invite no more than four pages of written submissions from each party about the topic of costs, to be received in my Chambers no later than 24 hours before the time and date of the hearing.
Orders
I make the following orders:
1. The charge in the notice of motion of 10 December 2015 of the defendant, Mr Darren Challis, that the plaintiff, DHR International Inc, committed the offence of contempt of court is dismissed, and I enter a verdict of acquittal on that charge.
2. Costs are reserved.
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Decision last updated: 22 April 2016