Forestview Nominees Pty Ltd v Perpetual Trustees W.A. Ltd [1998] FCA 946

IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRYNo. WAG 114 of 1994 GENERAL DIVISION BETWEEN : FORESTVIEW NOMINEES PTY LTD First Applicant SILKCHIME PTY LTD Second Applicant AND: PERPETUAL TRUSTEES W.A. LTD Respondent PERPETUAL TRUSTEES W.A. LTD Cross-claimant FORESTVIEW NOMINEES PTY LTD SILKCHIME PTY LTD THE NATIONAL MUTUAL LIFE ASSOCIATION OF AUSTRALASIA LIMITED Cross-respondents CORAM: CARR J. PLACE: PERTH DATE: 25 JUNE 1998 EX TEMPORE REASONS FOR JUDGMENT This is a notice of motion brought on behalf of Perron Investments Pty Ltd and Belmont Forum Shopping Centre Pty Ltd, whom I will call the moving parties, for orders that the applicants and/or Mr Norman Phillip Carey, who is described as a director of the applicants and who I think it is common ground is and was at all material times a director of the applicants, and/or Mr John Panegyres, a partner of the applicants' solicitors, be fined or punished as the court may in its discretion direct for certain alleged contempts. The moving parties have made it clear that they do not seek punishments either by way of fine or otherwise and I, in the course of argument, made it clear that, having read the papers, I did not regard this as an appropriate case for such punishment. The moving parties were the recipients of subpoenas to produce certain documents. But before I come to the circumstances which give rise to this notice of motion I should say something about the principal application. I will do so very briefly. In the principal application the applicants seek relief in relation to a restrictive covenant registered over certain land which one of the applicants now owns and the other of the applicants had previously owned. The restrictive covenant was in terms which prevented the use of certain land retained by one of the applicants for, in a nutshell, development of a shopping centre. One aspect of the case has been up as far as the High Court of Australia where eventually the enforceability of the restrictive covenant was upheld. There remains to be decided whether that restrictive covenant is void or unenforceable by reasons of the Trade Practices Act or as a matter of public policy in relation to the town planning legislation. Particularly in relation to the Trade Practices Act issues it became necessary, for the disposal of the competition arguments under section 45B of that Act, to define a relevant market in which the purpose or effect of the restrictive covenant should be assessed and in particular whether the covenant had the purpose or effect of substantially lessening competition. This leads to the subpoenas. Towards the end of 1996 and, I think, through last year, the applicant companies engaged in the process of issuing subpoenas to the proprietors of what were regarded as comparable shopping centres in the relevant market with a view to establishing the proposition that the respondent, as the proprietor of the neighbouring shopping centre, was in a position (and again I summarise) to charge more in the way of rentals because of its market power in that relevant market. Hence a series of subpoenas went out to get the records of the proprietors of the other shopping centres operating in the market, two of whom eventually turned out to be the moving parties in these proceedings. There had been at least two prior occasions when a series of subpoenas were sought by and granted to the applicants for other shopping centre proprietors to produce their documents. It very rapidly emerged that there were problems of confidentiality. Orders were formulated to protect highly sensitive information from falling into the hands of competitors of the recipients of the subpoenas. I think it is fair to say that no problems arose prior to the incidents which I will just describe, or subsequently, because the confidentiality orders were complied with. The orders with which this matter is concerned were made on 26 September last year by a deputy district registrar and I incorporate, without reading them all, the terms of those orders into these oral reasons. In particular, though, order 1(a) provided that: Access to the documents shall be limited to the legal representatives of the applicants and the respondent and one or more nominated expert witnesses - and then there were built in various further safeguards, two of which are relevant to the present proceedings. First, that 14 days before producing any subpoenaed documents to an expert witness the applicants' solicitors were to give notice to the relevant recipients' solicitors of the name or names of such expert. I interpose here that the intent of that order was that if the recipient of a particular subpoena, in this case either Perron Investments Pty Ltd or Belmont Forum Shopping Centre Pty Ltd, having been provided with that information recognised the name as being someone linked to or being a competitor in the relevant market, then the recipient had 14 days in which to object. Secondly, there was an order that before any expert witness was to be given access to the documents, he or she was to sign an acknowledgment of having received a copy of the confidentiality orders, the acknowledgment also containing an undertaking to abide by the confidentiality orders. Amongst other things, there were other orders such as the stamping of the documents with a particular endorsement and the like, but those are the two particular orders that are relevant to the present matter. One of the applicants' witnesses was a Mr Wilson, a consultant in the property industry with some 20 or more years of experience. In relation to earlier subpoenas there had been no problems. In particular I think a subpoena in October 1997 had been complied with and documents were produced and the procedure which I have just described was applied in relation to Mr Wilson. Notice was given to the recipients of the subpoena that their documents were going to be sent to Mr Wilson, Mr Wilson gave an acknowledgment and an undertaking to abide by the confidentiality orders, and there were no problems. Unfortunately, in relation to the orders of 26 September 1997, the following month the documents produced pursuant to the subpoenas to the moving parties were sent to various expert witnesses, I think about five of them, one of whom was Mr Wilson. The moving parties took no objection to any of the other experts but had great concerns that they were not informed about the fact that the documents were going to be sent to Mr Wilson. Subsequently they have registered in their notice of motion and in their statement of charges, concerns that there was also no obtaining of the acknowledgment or undertakings, and hence these proceedings were instituted. As I said a minute ago, the notice of motion was followed by the filing and service of a statement of charges in accordance with Order 40 rule 6 of the Federal Court Rules. Mr Panegyres, the partner in the firm of solicitors representing the applicants, has from the very outset freely acknowledged the omissions on his part. They surfaced, I think in mid-January this year, in the course of a conversation between Mr Hotchkin, solicitor for the moving parties, and himself in the context of a further subpoena being returnable. On that coming to light, Mr Panegyres advised the District Registrar of the circumstances and that particular return date was vacated. Then there followed immediately steps to comply with so much of the orders as could have been complied with, i.e. obtaining of acknowledgments and undertakings from all the expert witnesses including Mr Wilson. But this, of course, was after the event. This was after they had had the documents. Nonetheless I think in fairness it should be mentioned that that was done. Apologies have been extended on three occasions on behalf of Mr Panegyres and no attempt has been made to defend the proceedings brought against him. He has freely admitted his omissions and bitterly regrets them. I accept the sincerity of the apologies tendered and I accept, as Mr Stone has submitted in the third of his submissions, that this has had a significant personal effect on Mr Panegyres. Let us hope that from this day onwards he can put them behind him. The applicants, represented separately by Mr Birmingham, senior counsel, and Mr Redding, oppose the motion and the charges on various grounds but there are two principal ones which I think I need to consider. First, it is said that the only person to whom these orders were addressed were the applicants' solicitors and that it cannot be said that the orders of 26 September 1997 were addressed to the applicants. I will give very short reasons for rejecting that submission. On the face of them, the orders are not confined in the categories of persons to whom they are addressed. I take it that they are addressed to the whole world including the applicants. Furthermore, as Mr Hanly, counsel for the moving parties, pointed out in reply, there are other parts of the orders which contain a fair indication that they are intended to be addressed to the applicants. The applicants, as the parties seeking these subpoenas, I would have thought would be very much in the forefront of the mind of the person drafting the orders to which I have referred. I will come back to the question of vicarious liability in a moment. On the face of them, I consider that they quite clearly bound the applicants; that is, the two applicant companies. Secondly, it is said that the statement of charge does not identify the applicants as being charged with the contempts to which I have just referred, and I emphasise that they are civil contempts. On any basis they would fall, historically, into the category of civil contempts, not criminal contempts. In my view the applicants are sufficiently identified. In paragraph 1 of the statement of charge the solicitor is described as acting on behalf of the applicants and in respect of one of the omissions which form the subject of the charge and in respect of the other, likewise, the solicitor is described as acting on behalf of the applicants. Similarly, in the notion of motion, paragraph 1, there is a clear reference to the applicants. Admittedly that is not spelt out as Forestview Nominees Pty Ltd and Silkchime Pty Ltd, but it is quite clear on the face of both those documents that they are the applicants. Then it is said that, as a matter of law, the applicants cannot be held to be in contempt when they had no knowledge of the omission and the omissions were, so far as they were concerned, casual, accidental or unintentional. A distinction was sought to be drawn between the circumstances of the House of Lords decision in Heatons Transport v TGWU [1973] AC 15, and the present circumstances. Both in the context of whether the orders were addressed to the applicants and in the context of whether liability can be sheeted home to the applicants on the perceived distinction, I reject the submission. The omissions which form the focus of the present motion do not in my view fall within the terms "casual, accidental or unintentional" in the sense in which those terms are used in the decided cases. Secondly, there is no doubt that Mr Panegyres was acting within the actual authority conferred upon him by the applicants and in my view in those circumstances what he did constituted acts or omissions on the part of the applicants. So I find formally that there were omissions, as Mr Panegyres has freely admitted, of the types complained of in the statement of charge and notice of motion. I find that those omissions amount in law to civil contempt of court. I do not intend to proceed to record any convictions. I then move to the question of what remedies should be administered. I think there should be an order that the respondents to the motion, that is, the applicants and Mr Panegyres, should pay the moving parties' costs to be taxed on the basis that all reasonable costs incurred by the applicants in relation to the motion should be paid. Secondly, the motion insofar as it is addressed to Mr Carey should be dismissed. Mr Hanly in that regard sought orders that Mr Carey be directed to swear the affidavit referred to in paragraph 2 of the motion, but as I see it that is relief sought against the applicants rather than against Mr Carey personally. So the next order, as I have just indicated, will be that the motion be dismissed as against Mr Carey. There will be an order in terms of paragraph 2 without specifying the deponent but it would seem to me to be desirable that the deponent should be someone who quite clearly has knowledge of the matters referred to there; direct and personal knowledge. There will be liberty to apply if that deponent is not Mr Carey. There will be liberty to the moving parties to apply. Paragraph 3 Mr Hanly told me was an alternative to paragraph 2. As I propose to make an order in relation to paragraph 2 there is no need to make an order in relation to paragraph 3. Paragraph 4 has fallen away in view of what Mr Birmingham said and in view of the affidavit evidence, that that has already been done. I feel that as a matter of policy it would be appropriate to make an order in terms of paragraph 5. Insofar as Mr Wilson's evidence will then be confined to his expert evidence on other aspects of the market definition, well, that I would not have thought would detract necessarily from his evidence. If it were to be the subject of adverse comment at trial, then a very ready answer would be to point to the minute of orders which I am going to invite the moving parties to bring in in a moment, and secondly the applicants already have, as I have been told, one other expert on this particular aspect and furthermore there are, I would imagine, lots of other experts who can be retained to review this information and give the expert evidence which Mr Wilson would otherwise give. I appreciate that it may involve some inconvenience but I think as a matter of policy it flows through that a court should, to some extent, express its concerns about the breach of the orders. I accept that it was completely through inadvertence, but I think it is appropriate that an order should be made in terms of paragraph 5, limited only to the documents produced by the moving parties. The order which I will make in relation to Mr Carey will be that the motion will be dismissed as against him, secondly that the moving parties to the motion should pay any costs which Mr Carey may have incurred, and that thirdly the moving parties be indemnified in respect of those costs by the other respondents to the motion. I direct that the moving parties bring in a minute of orders with copies to the other side and if there are any problems, would people please get in touch with my associate. I certify that this and the preceding seven (7) pages are a true copy of the Reasons for Judgment of Justice Carr