REASONS FOR JUDGMENT
1 On 23 December 2011, the Court made the following orders:
1. Subject to Order 4, MWREDC Limited ("REDC") and Narelle Pearse give discovery to Frank Mayne Mason ("Mason") of the following documents:
1.1 any Board Paper (or Report or Memorandum submitted to or prepared for the Board of REDC) or any entry in a Board Paper or Report or Memorandum so prepared concerning the subject matter of the attendance of Mason at activities associated with a "REDC 2010 Trade & Investment Mission" to the People's Republic of China (the "Mission") including but not limited to:
(a) any invitation to Mason or permission given to Mason to attend the Mission or a document authorising him to attend the Mission (an example of which is a Registration Form for participation in Mission activities);
(b) any document disclosing the cost of attendance at activities associated with the Mission given to the Mason prior to the commencement of the Mission;
(c) any invoice or other bill sent to Mason regarding his attendance at any activities associated with the Mission;
(d) any minutes or briefing papers concerning payment by Mason of any invoice or bill in respect of his attendance at activities associated with the Mission or any of Mason's subsequent dealings with REDC or Ms Pearse in connection with the Mission;
1.2 any letters, emails or other communications between REDC and Mason or between REDC and the Department of Employment, Economic Development and Innovation regarding payment by Mason of any invoice or bill concerning his attendance at any activities associated with the Mission or any of Mr Mason's subsequent dealings with REDC or Ms Pearse in connection with the Mission;
1.3 any memos, file notes, records or telephone conversations or other documents of REDC or Ms Pearse concerning Mason and matters connected with the payment or claims for payment of any invoice or bill relating to Mason's attendance at any activities associated with the Mission or any of Mr Mason's subsequent dealings with REDC or Ms Pearse in connection with the Mission.
2. Subject to Order 4, Ian Fletcher (the "Chief Executive"), in his capacity as Chief Executive of the Department of Employment, Economic Development and Innovation of the State of Queensland, give discovery to Frank Mayne Mason ("Mason") of any document or copy of a document falling within the description of documents referred to in Order 1, in the possession of the Department of Employment, Economic Development and Innovation of the State of Queensland.
3. The applicant's costs of and incidental to the Application be paid by the first and second respondents.
4. The first, second and fourth respondents have liberty to apply in relation to the question of the terms and conditions of security to be provided by the applicant in connection with the provision of discovery by the first, second and fourth respondents and those respondents and the applicant are directed to confer with a view to resolving the terms and conditions upon which the applicant is to provide security.
2 These orders were made in proceedings under rule 7.23 of the Federal Court Rules 2011 in which Mr Mason as a prospective applicant sought orders under rule 7.23(2) for discovery from prospective respondents of particular documents said to be directly relevant to the questions Mr Mason seeks to agitate in the foreshadowed proceedings claiming the relevant relief. The first prospective respondent and the first respondent to this application is an entity described as MWREDC Limited ("MWREDC") which is an Australian public company limited by guarantee. The database records maintained by the Australian Securities and Investments Commission ("ASIC") describe the company as a non-profit company. The acronym MWREDC seems to stand for Mackay Whitsunday Regional Economic Development Corporation.
3 The second respondent to this application (and the second prospective respondent in the foreshadowed proceeding) is Ms Narelle Pearse. Ms Pearse is the Chief Executive Officer of MWREDC.
4 As to the orders made on 23 December 2011 and the reasons for judgment in support of those orders see Mason v MWREDC Limited [2011] FCA 1512.
5 Apart from MWREDC and Ms Pearse, the orders on 23 December 2011 cast an obligation upon Mr Ian Fletcher in his capacity as the Chief Executive of the Department of Employment, Economic Development and Innovation of the State of Queensland to give discovery to Mr Mason of documents in the possession of the Department falling within the description of documents set out in order 1.
6 Rule 7.25 provides that if a person is ordered to give discovery under rule 7.23, the person must file a list of documents in accordance with rule 20.17. The contents of rule 20.17 are well known. In particular, rule 20.17(4) provides that the list of documents must be verified by an affidavit sworn or affirmed in accordance with rule 20.22. Rule 7.29 provides that a person against whom an order is sought under rule 7.23 may seek an order that the prospective applicant give security for the person's costs and expenses including the costs of giving discovery and production, and the costs of complying with any order made under rule 7.23. In addition, rule 7.29 contemplates an application for an order that the prospective applicant pay the person's costs and expenses.
7 The obligations cast by orders 1 and 2 upon MWREDC, Ms Pearse and the Department of the State of Queensland, respectively, were subject to a qualification relating to the resolution of the question between Mr Mason and each of those parties as to the terms and conditions upon which Mr Mason would provide security to them in connection with their provision of discovery of the identified categories of documents. Order 4 gave liberty to the respondents to apply to the Court in respect of that matter. Order 4 directed the parties to confer with a view to resolving the terms and conditions upon which security would be provided for the purposes of rule 7.29. In the absence of any resolution, order 4 contemplated that the matter of the adequacy of security would, one way or another, be brought back before the Court for determination should the parties be unable to reach agreement.
8 As things transpired, security as between Mr Mason and the Department was resolved quite quickly.
9 The question of security as between Mr Mason and the first and second respondents took some time to resolve but that matter will be mentioned further shortly.
10 By the present interlocutory application, Mr Mason seeks these orders:
1. That [MWREDC and Ms Pearse] be found to be guilty of contempt of Court as set out in the attached Statements of Charge, and that they be punished accordingly.
2. That [MWREDC and Ms Pearse] pay costs ordered on 23 December 2011 on an indemnity basis.
3. That [MWREDC and Ms Pearse] pay the costs of and incidental of compliance with the orders of the Court dated 23 December 2011 to date including if appropriate on an indemnity basis.
4. That [MWREDC and Ms Pearse] pay the costs of and incidental of this interlocutory application including if appropriate on an indemnity basis.
11 The statement of charge against MWREDC contains two charges recited in these terms. At p 1 of the statement of charge there is a general statement to MWREDC that: "You are charged with contempt of court in that you committed the contempts set out in the charges on pages 2-5 hereof". The first charge is in these terms: "Since the orders of the [Court] made on 23 December 2011 you have neglected to comply with Order 1 in a timely manner". There are seven particulars of that charge recited in the statement of charge. The second charge is in these terms: "Since the orders of the [Court] on 23 December 2011 you represented on or about 15 February 2012, through your former lawyers McKays Solicitors, that you had given discovery in compliance with Order 1 (other than privileged or confidential material), whereas that was not the case". There are six particulars of that charge recited in the statement of charge and particular 6 has three sub-particulars of which particular 3 has three further sub-paragraphs.
12 The statement of charge against Ms Pearse contains two charges in precisely the same terms as the above two charges with the same particulars recited in support of each charge.
13 Because the orders made on 23 December 2011 contemplated likely disagreement between the parties as to the amount to be provided by way of security and a real probability of the matter being brought before the Court again, the orders of 23 December 2011 did not contain any provision as to time for compliance with orders 1 and 2. Having regard to the contention that MWREDC and Ms Pearse have neglected to comply with order 1 and engaged in conduct of representing on or about 15 February 2012 through their solicitors that discovery in compliance with order 1 had been given, when it had not been given, it becomes important to identify precisely the moment in time when the obligation to give discovery actually crystallised.
14 In so doing, it is important to have regard to the following matters.
15 The jurisdiction of the Federal Court to punish contempts arises under s 31 of the Federal Court of Australia Act 1976 (Cth). Section 31(1) confers upon the Federal Court the same power to punish contempts as that possessed by the High Court. In other words, s 31 makes clear that the Federal Court has the contempt powers inherent in the exercise of the judicial power of the Commonwealth (Re Colina and Another; Ex parte Torney (1999) 200 CLR 386 at [16] per Gleeson CJ and Gummow J; Australian Competition and Consumer Commission v Contact Plus Group Pty Ltd (In Liq) [2006] FCA 695 (2006); 232 ALR 364).
16 Mr Mason as prosecutor carries the onus of proof. Each charge must be proved beyond reasonable doubt: Witham v Holloway (1995) 183 CLR 525 at 534, Brennan, Deane, Toohey and Gaudron JJ. In Witham an order had been made requiring Witham to swear and file an affidavit disclosing all his property in Australia, its location and value and documents evidencing title. The primary judge found on the balance of probabilities (as the standard thought to be applicable to a charge of civil contempt) that Witham "showed at least recklessness in swearing the affidavit". Proof on the balance of probabilities was found to be the wrong standard of proof. The conduct finding however, on a disclosure issue, was one of "recklessness". At p 530, the majority observed that in general a civil contempt involves "disobedience" to a Court order whereas a criminal contempt is a contempt in the face of the Court or an interference with the course of justice. Disobedience to a Court order however amounts to criminal contempt if it involves "deliberate defiance" or if it is "contumacious": Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 108, Gibbs CJ, Mason, Wilson and Deane JJ.
17 Civil contempt proceedings were thought to be primarily directed to compelling obedience to an order or primarily remedial in the interests of the citizen rather than punitive in the public interest. Nevertheless, the majority observed at p 533 that all orders whether injunctions or simply procedural orders are all made in the interests of justice and non-compliance interferes with the interests of justice even if the position inter-parties is remedial. Although the majority recognised a distinction between civil and criminal contempt, the basis for the distinction was found to be "in significant respects illusory" and all proceedings for contempt must be seen as criminal in nature requiring proof beyond reasonable doubt because the "usual outcome of successful proceedings" on either basis is "punishment": see also Australian Competition and Consumer Commission v Info4pc.com Pty Ltd (2002) 121 FCR 24 at [4].
18 Although the standard of proof for charges of civil and criminal contempt is beyond reasonable doubt as a successful charge in either case results in punishment, the proper and precise identification of the conduct charged remains important. Disobedience constituted by "deliberate defiance" of an order (a deliberate refusal sometimes said to be contumacious) is criminal contempt. Deliberate conduct of commission or omission constitutes "wilful disobedience unless it be casual, accidental or unintentional" [emphasis added] (Mudginberri at p 108). Wilful disobedience by a conscious act short of deliberate defiance is a civil contempt.
19 The formulation in Mudginberri of the test of contempt by wilful disobedience suggests that wilful disobedience is not made out if the conduct is casual, accidental or unintentional. However, the Victorian Court of Appeal in Re Perkins; Mesto v Galpin [1998] 4 VR 505 at 512-513 considered that wilful disobedience brought about by casual, accidental or unintentional conduct is not an answer to a contempt proceeding for such disobedience. The contempt by wilful disobedience would be made out even though disobedience was attributable to casual, accidental or unintentional conduct but the relevance of the character of the conduct is that although the Court would have jurisdiction to punish for proven wilful disobedience, the Court might not exercise its discretion to punish if the conduct is explained by and accepted as casual, accidental or unintentional conduct: see also Advan Investments Pty Ltd v Dean Gleeson Motor Sales Pty Ltd [2003] VSC 201 at [45]; ACCC v Contact Plus Group at [23].
20 This view seems to be inconsistent however with the express language of Mudginberri at 108 as the qualification "unless" seems to be a qualification upon the circumstances when disobedience is "wilful" that is, when the conduct is not a wilful act of deliberation because the conduct is truly casual, accidental or unintentional. The qualification in Mudginberri at 108 is consistent with the prosecutor's obligation to prove a deliberate act of commission or omission in breach of the order although it is not necessary to prove any "subjective intention" to disobey the order: ACCC v Info4pc.com at [10]. The deliberate act of omission might be made out by evidence of conduct showing that the person bound by the order chose to take steps that fell short of obedience to the order, not because the person intended to disobey but because he or she chose to take steps that amount to disobedience. Although the prosecutor must show a deliberate act or omission, it is no part of the prosecutor's case to negative disobedience due to a casual, accidental or unintentional act or omission. The person charged with contempt might seek to show that the act or omission is explained by facts showing disobedience due to one of those three factors.
21 As to precision in the charge, rules 42.11 and 42.12 provide that if a party alleges that a contempt has been committed by a person "in connection with a proceeding in the Court", an application for punishment of the alleged contempt is made by interlocutory application supported by a statement of charge "specifying the contempt with sufficient particularity to allow the person charged to answer the charge", together with the affidavits on which the person making the charge intends to rely to prove the charge.
22 In Coward v Stapleton (1953) 90 CLR 573, Williams ACJ, Kitto and Taylor JJ observed at 579 and 580 that "it is a well-recognised principle of law that no person ought to be punished for contempt of Court unless the specific charge against him be distinctly stated …" [emphasis added]. The statement of charge taken together with the particulars of charge must distinctly state a specific charge. At 580 however, the Court in Coward v Stapleton said this:
The gist of the accusation must be made clear to the person charged, though it is not always necessary to formulate the charge in a series of specific allegations ...
23 Rule 42.12(a) requires "sufficient particularity" to allow the person charged to answer the charge. In Coward v Stapleton, the accused gave answers (to questions asked by the primary judge) that were found to be "fantastic, absurd and impossible to believe" and answers that "represented a shuffling and fantastic attempt to conceal the truth …" (574). The primary judge charged and convicted the appellant of contempt in "[refusing] to answer lawful questions touching his trade dealings, property and affairs" (576). The answers were so plainly absurd as to convey an intention not to give any real answers (578). The charge was said not to identify a "specific offence" by reference to questions and answers. In that context the Court observed that the accused understood the "gist" of the accusation made against him because the accused "knew perfectly well that he was in danger of being held guilty of contempt for refusing to answer questions, and, broadly what those questions were" (580) and, in context, the accused "could not have been in any doubt" (580) that he was being given an opportunity to "give answers which really were answers" (580) and that if he refused to do so, he would be liable for punishment for contempt [emphasis added in each quote].
24 In context, Coward v Stapleton is not authority for the proposition that formulating the charge so as to capture the gist of the accusation is sufficient. It is authority for framing the charge in a way that sets out the gist of the accusation so long as doing so makes the accusation "clear to the person charged" such that there is "no reason to doubt" that the accused "knows perfectly well" what is alleged against him or her with the result that the accused "could not [be] in any doubt" of the accusation made against him or her. Reciting the gist of the charge should not be understood as licence to use shorthand descriptions or loose language falling short of proper precision sufficient to meet the purposive descriptions adopted by the High Court set out at [22] and [23] of these reasons.
25 In Inghams Enterprises v Timania [2005] FCAFC 155; (2005) 221 ALR 823 at 835, Tamberlin, North and Dowsett JJ said this:
The concept of the "gist" of the charge is one that should be approached with some caution in the area of contempt, where precision in formulation is critical. This concept can tend to distract attention away from the language of the original statement of charge to an inference as to what is the intent of the statement of charge.
[emphasis added]
26 Part 39 of the Rules contains rules dealing generally with Orders.
27 Rule 39.01 provides that an order takes effect on the date on which the order is made. Rule 39.02 provides that a person ordered to do an act or thing must do so in the time specified in the order or, if no time is specified, "within 14 days after the date of service of the order on the person". Rule 39.31(1)(a) and (b) provide that an order must be "entered" if the order is to be "served" or if the order is to be "enforced".
28 Part 41 of the Rules deals with the topic of "Enforcement".
29 Rule 41.02(1) provides that if an order is made in favour of a party subject to the fulfilment of a condition, the party cannot enforce the order until the condition is fulfilled. Rule 41.04(1) provides that a person who is ordered by the Court to do, or not to do, an act or thing, must comply with the order. Rule 41.06 provides for an endorsement to be made upon an order, in the following circumstances and terms:
41.06 Endorsement on order
If an order requires a person to do, or not to do, an act or thing, whether within a certain time or not, and the consequences of failing to comply with the order may be committal, sequestration or punishment for contempt, the order must carry an endorsement that the person to be served with the order will be liable to imprisonment, sequestration of property or punishment for contempt if:
(a) for an order that requires the person to do an act or thing - the person neglects or refuses to do the act or thing within the time specified in the order; or
(b) for an order that requires the person not to do an act or thing - the person disobeys the order.
[emphasis added]
30 Rule 41.07(1) provides that an order contemplated by rule 41.06 must be served personally on the person who is bound to do, or not to do, the act or thing within the time mentioned in the order or if no time is mentioned, within a time that would allow the person to comply with the order. The time allowed to MWREDC and Ms Pearse for compliance with order 1 of 23 December 2011 is by operation of rule 39.02 a period described as "within 14 days of service of the order". However, rule 41.07(2) creates a carve-out or exception in these terms:
(2) However, if the person:
(a) was present when the judgment was pronounced or the order was made; or
(b) was notified of the terms of the order orally, by telephone or electronically;
the person is taken to have been served with the order at the time the person heard or was notified of the order.
[emphasis added]
31 Rule 41.08 deals with committal of a person and the sequestration of a person's property in circumstances where that person has failed to comply with an order of the Court. Rule 41.08 provides that if the person in default is a corporation, a party may apply to the Court for an order for the committal of an officer of the corporation or the sequestration of the corporation's property. However, no application for either order may be made unless the officer has been served with the order as required by rule 41.07(1) and the order carries the endorsement required by rule 41.06, and the officer was present when the order was made or was notified of the order in accordance with rule 41.07(2).
32 In this case, the order of 23 December 2011 was not entered until 16 April 2012 and although there is a contest on the issue of service, the order was served on either 19 April 2012 (the applicant's contended date) or 23 April 2012 (the respondents' contended date). The respondents are content to accept 19 April 2012 as the date of service for the purposes of these proceedings.
33 So, when it comes to enforcement of an order requiring a person to do an act or thing, the general scheme of the Federal Court Rules is that the order is to be "entered" if it is to be served or enforced (rule 39.31(a)); entry of an order is effected by the act of the Court or a Registrar "authenticating" the order by signing the order and the Court, or a person at the direction of the Court, or a Registrar, affixing the stamp of the Court to the order (rule 39.35(1)); a party to a proceeding is entitled to a copy of an authenticated order on request (rule 39.35(2)); if the order is conditional it cannot be enforced until it becomes unconditional; the order must be served personally on the party bound by the order; it must bear the endorsement required by rule 41.06; personal service of the physical authenticated order or a true copy of the authenticated order endorsed under rule 41.06 tells the person bound by the order, in a way that enables the person to reflect upon the content of the order, first, the terms of the Court's order containing the obligation to do something and, second, one of three possible consequences (committal, that is committal to prison; sequestration of property or punishment for contempt) should the person neglect or refuse to do the relevant thing within the time specified in the order.
34 In this case, according to the orthodoxy of this scheme, upon personal service of the authenticated order (that is, service of either an original signed and stamped order or a "true copy" of an authenticated order (see Dictionary, Federal Court Rules: "authenticity of a document")) on each respondent, time for compliance with the order became fixed as a period of 14 days from that date and the obligation to do the relevant thing had to be discharged within those 14 days.
35 Rule 41.07(2) however recognises that a person might be "taken to have been served with the order" even though he or she may not have been served personally as required by rule 41.07(1). If the Court is satisfied beyond reasonable doubt by direct evidence of the fact in issue or by reason of inferences as to the fact in issue drawn from findings of fact that the relevant person was "notified" of the "terms of the order" either orally, by telephone or electronically, the person is then taken to have been served at the time of notification. However, the evidence would need to demonstrate beyond reasonable doubt first, that each respondent was notified of the order and the method by which that notification occurred and second, each respondent was notified of the "terms" of the order.
36 A further question is whether each respondent is required to be told as part of the "notification" that should the respondent neglect or refuse to do the act or thing the subject of the order within 14 days of being taken to have been served by reason of the oral, telephonic or electronic notification, that the consequences for that person may be committal (imprisonment), sequestration of property or punishment for contempt.
37 The principle underlying rule 41.07(2) is that the notification of the terms of the order in one of the ways suggested in rule 41.07(2) puts the person in substantially the same position, so far as the proper protection of the interests of the person bound by the order is concerned, as they would otherwise be in had personal service of the entered order been effected under rule 41.07(1). However, the protective balance required to be observed in circumstances where the party bound by the order has not actually been served personally and therefore does not have a document to reflect over and guide his or her mind on the content of the order, suggests that the consequences of non-compliance in terms of the requirements of rule 41.06 should also be notified to the relevant person either orally, by telephone or electronically.
38 Otherwise, the person bound by the order would not be in a substantially similar position, so far as enforcement is concerned, to a person served with a duly endorsed order in compliance with the rule.
39 There is no evidence that suggests that the order ultimately served on the solicitor for the respondents was endorsed under rule 41.06. Nothing in the correspondence suggests that the applicant's lawyers, in the absence of having entered and served the order according to the orthodox scheme of the rules, were pressing, immediately after the making and pronouncement of the order on 23 December 2011, the solicitors for the respondents to confirm that each respondent had been told (by one of the identified methods) of the terms of the order, a 14 day period for compliance (said to commence upon the respondents having been told of the order) or anything about the possible consequences of non-compliance with the order as identified in rule 41.06.
40 The communications between the respondents and their solicitors are, of course, privileged communications and it is highly unlikely that had these matters been pressed in this way, the solicitors would have confirmed to the applicant's lawyers any aspect of those communications. This is why the Federal Court Rules (like the Rules of the Supreme Courts of the States), operate on the footing that orders obliging a person to do or not to do acts or things are to be entered, endorsed as required by, in the case of this Court, rule 41.06, and served personally on the party bound by the order. Electing to avoid the primacy of personal service of a true copy of an authenticated order properly endorsed according to rule 41.06 results in a debate about the secondary quality of the evidence of notification to the party bound by the order, of communications made with that party orally (that is, face-to-face notification), by telephone or electronically and whether the Court can be satisfied of those matters beyond reasonable doubt.
41 Any communications constituting "notification" as between the solicitors for Mr Mason and either of the respondents directly would be improper in circumstances where those solicitors knew that each respondent was represented by lawyers. That is why the applicant might seek to demonstrate notification of the relevant matters to the respondents having regard to concessions that might be recorded in the exchanges between the solicitors for the respondents and the solicitors for the applicant about things notified to the respondents. An examination of that material, as already mentioned, may well not reveal any confirmation of notification of the relevant matters to the respondents as the communications between the respondents and their solicitors will be privileged and in all likelihood no relevant disclosures will be made.
42 However, inferences may properly be drawn from facts found as to whether the respondents had notice of the terms of the order and the evidence in relation to that matter will be examined shortly.
43 Nevertheless, properly entering and serving a duly endorsed authenticated order on the party bound by the order is the proper course for ensuring enforcement of the order. It is not just one of the "options" open to a party having the benefit of an order.
44 Order 37, rule 2(1) of the Federal Court Rules immediately before the commencement of the Federal Court Rules 2011 contained a prohibition upon the enforcement of an order "by committal or sequestration" unless the order or a certified or office copy of the order was served personally upon the person bound by the order. Order 37, rule 2(3) provided that the relevant order must bear the notice set out at Order 37, rule 2(3) to the effect that where an order required the person bound to do an act within a specified time and the person refused or neglected to do the act within that time, the person would be liable to orders for imprisonment or sequestration of property. Where the order required the person bound to abstain from doing an act, the notice was required to tell the person bound that if the order was disobeyed, the person would be liable to the same consequences.
45 In Windsurfing International Inc v Sailboards Australia Pty Ltd (1986) 19 FCR 110, Re Modern Woodcraft Pty Ltd (In Liquidation) (1997) 75 FCR 245 at 252 and 253 and Siminton v Australian Prudential Regulation Authority [2006] FCAFC 118 at [67], the Federal Court accepted that the prohibition under Order 37, rule 2(1) together with 2(3) upon enforcing an order "by committal or sequestration" did not extend to precluding a finding of contempt otherwise open and the imposition of a fine. Only committal or sequestration was precluded.
46 Questions might arise as to the scope and application of the exception contained in Order 37, rule 2(5).
47 Rules 41.07 and 41.08 of the Federal Court Rules 2011 do not contain any express prohibition upon enforcement of an order except in the circumstances of rule 41.08(3) which provides that no application may be made for an order for the committal of an officer of a corporation (or organisation) unless, first, the officer has been served with the order in accordance with rule 41.07(1) and the order carries the endorsement required by rule 41.06, and second, the officer was either present when the order was made or was notified of the order in accordance with rule 41.07(2). There is no other express prohibition upon enforcement of an order by committal of the person or by sequestration of the person's property in the terms as framed by the earlier Order 37, rule 2(1). Moreover, there is no express prohibition upon enforcement of an order by punishment of a person for contempt.
48 The structure of the Federal Court Rules 2011 provides for the endorsement obligation arising under rule 41.06 in respect of all three classes of possible enforcement orders namely, committal (imprisonment), sequestration of property and "punishment for contempt", unlike the earlier Order 37, rule 2(3). Rule 41.07(1) provides for personal service of the primary order duly endorsed under rule 41.06 subject to the exception contained in rule 41.07(2). That exception thus operates in relation to each of the three classes of enforcement orders contemplated by rule 41.06. It follows that a person will be taken to have been served with the relevant primary order at the time of notification of the terms of the order either orally or by telephone or electronically, for the purposes of subsequent enforcement proceedings whether they concern an application for orders for committal or sequestration of property or punishment for contempt.
49 The language of rule 41.07(2) suggests, in terms, that what is required is notification of the "terms of the order". The terms of rule 41.07(2) do not expressly require proof of notification of the possible consequences of a person's neglect or refusal to do the act or thing the subject of the order within the time specified in the order. In this respect, a person bound by an order who is "notified" of the terms of the order either orally or by telephone or electronically, is at a significant disadvantage in terms of subsequent enforcement proceedings because that person does not have the benefit of a served order containing an express endorsement focusing the person's mind upon the identified consequences of his or her neglect or refusal to do the act or thing in question. Although rule 41.07(2) does not require, in terms, notification of the consequences of neglecting or refusing to do the relevant act or thing, when the method of notification is oral, by telephone or electronic, the circumstance that the person bound by the order did not have before him or her the benefit of a true copy of an authenticated order bearing the endorsement required by rule 41.06 focusing the person's mind on the consequences of neglect or failure remains a material matter to be taken into account in the exercise of the discretion in an application for an order in punishment of a contended contempt.
50 The exception contained in rule 41.07(2) although broader than the well understood exception contained in Order 37, rule 2(5), nevertheless reflects a general rule recognised in the authorities upon which the rule is based: Langley, Ex parte; Ex parte Smith; Re Bishop (1879) 13 Ch D 110, Ronson Products Limited v Ronson Furniture Limited [1966] Ch 603; Trade Practices Commission v CG Smith Pty Limited (1978) 30 FLR 368; Sunbrite Products (Aust) Pty Limited v Jabuna Pty Limited (1980) 47 FLR 73; Windsurfing International Inc v Sailboards Australia Pty Limited (1986) 19 FCR 110; Re Intex Consultants Pty Limited [1986] 2 Qd R 99; and MacLeod v Australian Securities Commission [1993] FCA 553.
51 The facts as to notification of particular matters are these.
52 The respondents were represented in the principal application by solicitors and counsel. Mr Collins of counsel appeared on behalf of MWREDC and Ms Pearse on the hearing of the principal application. On 23 December 2011, judgment was pronounced. The orders were read aloud in Court. Mr Collins appeared on behalf of both respondents to receive the pronouncement of the orders and publication of reasons for judgment. A copy of the orders and the reasons in support of the orders were given to the parties including counsel for the respondents.
53 On 23 December 2011, the solicitors for the respondents sent an email to the solicitors for the applicant and said:
I refer to the orders made today in the Federal Court including that the parties caucus as to terms and conditions of security for costs for disclosure ordered by the Court.
Categories of cost for the first and second respondents will include:
1. Cost of time taken by the respondents to locate documentation.
2. Cost of legal advice taken by the respondents with respect to disclosure.
3. Cost of reproduction and delivery of documents.
In due course please advise your client's proposals regarding those categories of cost.
McKays Solicitors
54 On 4 January 2012, the solicitors for Mr Mason (Kelly Legal) responded to that email making particular comments and suggested the provision of security of $500. On 12 January 2012, Kelly Legal again wrote to McKays saying that they assumed that their proposal as to security was acceptable to the respondents and requested the provision of the documents without delay but in any event by no later than 20 January 2012. Kelly Legal wrote to McKays again on 17 January 2012 noting that no response had been received and requested the provision of the documents by 19 January 2012 at 4.00pm.
55 On 19 January 2012, McKays responded to Kelly Legal advising that they held "instructions" from the respondents to reject Mr Mason's proposal of $500 by way of security paid into the trust account of Kelly Legal as inadequate. McKays said that they held instructions from the respondents to make a proposal in settlement of the security issue, in these terms:
We have instructions to propose to settle security arrangements on the basis that your client pays into your trust account the amount of $2,500.00 by way of security. We advise that this amount does not include any of our client's time in collating the documents but rather includes the legal costs incurred by our clients in obtaining advice concerning their disclosure obligations and photocopying costs.
56 McKays said that the offer remained open for seven days. They also said this:
Would you please confirm that your client accepts the above proposal to resolve security arrangements, whereupon our client proposes to provide the documents within 7 days.
57 On 20 January 2012, Kelly Legal wrote to McKays in response to the 19 January 2012 letter. The 20 January 2012 letter recited much of the information from the McKays letter and then said this:
From all this we assume the following:
(a) Your firm has had adequate time to assess its costs to comply with the orders of [the Court]; and
(b) Your client has had adequate time to assess the time it will take, including in conjunction with your firm, the time it will take to provide the documents as ordered.
58 Kelly Legal observed that since the Crown Law Office on behalf of the Department had already accepted $500 as an amount adequate for security, Kelly Legal wished to have a precise breakdown of the legal and photocopying costs that would be incurred by the second respondents in providing the documents identified in the order. On 20 January 2012, McKays responded saying that they would endeavour to respond to the request by 24 January 2012. On 24 January 2012, Kelly Legal pressed for a response to the letter of 20 January 2012 and asked McKays to advise when the respondents would be in a position to provide the documents the subject of the order.
59 On 27 January 2012, McKays wrote to Kelly Legal saying that they were unable to give a definitive figure for the costs the respondents would incur as "the process is ongoing". McKays observed that the offer made by the respondents of $2,500 was made in an effort to resolve the issue of security. They said: "Our clients consider that $2,500.00 is a reasonable amount of security in the circumstances". McKays also said this:
… our client has concerns with the confidentiality of some of the documents that it is required to disclose. Our client proposes that it disclose those parts of the board minutes and other documentation that relate to the Orders made by His Honour, with the confidential content of such documents be "blacked out". Our client anticipates being able to provide the relevant documents within five (5) working days of the security issues being finalised.
Could you please advise whether our client's offer of security of $2,500 is satisfactory to your client so that our client may proceed with the disclosure as ordered by the Court.
60 On 30 January 2012, Kelly Legal wrote to McKays observing that since the respondents had had an opportunity since 23 December 2011 to prepare the disclosure material, an itemised account ought to be able to be provided as a calculation must have been undertaken to reach an assessment of $2,500.
61 On 31 January 2012, McKays wrote to Kelly Legal reasserting the position of the respondents that the proposed security of $2,500 was reasonable. They also said this:
Our client's legal costs alone incurred in complying with the Order to date well exceed the $2,500 … security requested. This does not include the photocopying costs or our client's time in attending to disclosure.
Our client has sought Counsel's advices on discovery and may require further advice from Counsel concerning the confidentiality aspects of the documents, as previously addressed in our correspondence to you.
We note your assertion that our client has had since 23 December, 2011 to prepare the disclosure material. With respect, our client is not required to provide disclosure until security arrangements are finalised. In the circumstances, whilst our client has commenced preparing the disclosure material, such process has not been finalised given that the security issues remain outstanding.
62 McKays reasserted a willingness on behalf of the respondents to settle the security question at $2,500 provided the matter could be resolved within seven days and concluded by confirming that the respondents proposed to be in a position to provide the discoverable material within five working days of the resolution of the security issue.
63 On 1 February 2012, Kelly Legal wrote to McKays putting the proposition that an amount of $2,500 seemed unreasonable as the other respondent had reached agreement at $500. The author also said that because the terms of the order seemed clear, the need for further legal advice including advice from counsel appeared to Mr Mason to be questionable. The author said that with a view to avoiding the need to re-list the matter before the Court, Mr Mason proposed that provided the respondents' documents were made available by 4.00pm the following Wednesday, 8 February 2012 (although the date was misstated as 1 February 2012), Mr Mason agreed to pay $2,500 into the trust account of Kelly Legal as security for the costs of disclosure. The proposal put was on terms that the question of whether costs would be payable by Mr Mason for disclosure by the respondents would be "subject to final determination of the dispute between our clients" [emphasis added]. The further element of the proposal was that the costs payable by Mr Mason for disclosure by the respondents would "if relevant, be as agreed or, failing agreement, as assessed". Kelly Legal sought an urgent response to that proposal.
64 On 7 February 2012, Kelly Legal again wrote to McKays referring to the letter of 1 February 2012 pointing out the obvious mistake in the date. The author observed that he had not heard from McKays and recited his assumption that the documents of the respondents would be made available by 4.00pm on 8 February 2012 and that failing production of the documents by that date, Mr Mason proposed to re-list the matter before the Court.
65 On 8 February 2012, McKays sent an email to Kelly Legal referring to the letter of 7 February 2012. The author said that he had understood that the letter of 1 February 2012 had been addressed in his absence on leave. He understood that the letter of 1 February 2012 had been forwarded to the respondents for instructions but in fact it had not. The letter suggested a particular protocol for exchanging communications between the two firms. The author of the email asked whether Mr Mason "still agrees to security for costs of $2,500". The author also said that he had been "instructed that the documents will be available for collection within 5 business days of your client's confirmation by return correspondence as to security for costs".
66 On 8 February 2012, Kelly Legal sent an email to McKays saying that Mr Mason agreed to the security arrangements "… on the basis set out in our letter of 1 Feb. Please provide the documents without further delay" [emphasis added].
67 On 8 February 2012, McKays responded saying:
Our client has not yet received an offer as to security for costs with reasonable notice for our client to prepare the documents for disclosure in accordance with the terms of offer [of security].
Notwithstanding, to progress matters our client is preparing the documents with a view to disclosure within 5 business days subject to your client's confirmation that your client gives security for costs of $2,500 in those circumstances. Please also confirm that your client has paid to your trust account the security amount, as foreshadowed by your earlier correspondence.
68 On 9 February 2012, Kelly Legal sent an email to McKays saying "I confirm we are holding $2500 in trust on account of security for costs. Please provide the disclosure without further delay".
69 On 13 February 2012, McKays wrote to Kelly Legal referring to their earlier letter of 27 January 2012 containing the proposal that certain documents be disclosed with confidential but irrelevant content redacted. The author requested confirmation that Mr Mason agreed with that process. On 13 February 2012, Kelly Legal said that they could not agree to the redaction process without knowing what information might be covered over. The author suggested that a summary of the information might be provided to enable a decision to be made about whether the redacted information is not discloseable under the orders. The letter concluded: "Please comply with the order of the Court without further delay".
70 On 15 February 2012, McKays wrote to Kelly Legal enclosing a "bundle of discoverable documents, pursuant to the Order made 23 December, 2011". In the letter, the author says that the respondents claimed legal privilege for the redacted content of four documents consisting of Minutes of Board Meetings on four particular dates. The author asserted that the disclosed documents contained confidential content irrelevant to the disclosure order. The letter concluded by saying that a "List of Documents" will also be given.
71 On 27 February 2012, Kelly Legal wrote to McKays raising a number of topics. First, no verified list of documents in accordance with the Federal Court Rules had been provided. A request was made for provision of a verified list. Second, the author said that having regard to the discovery of documents by the State of Queensland, documents had been disclosed which suggested that the respondents had failed to discover emails to particular addressees attaching papers for MWREDC Board Meetings and, according to the author, the emails ought to have been disclosed in accordance with the orders. Particular reference was made to emails of 6 and 16 May 2011. Third, the author suggested that letters had been written by the solicitors for the respondents on 14 and 24 October 2011 to Kelly Legal which having regard to the documents disclosed by all of the respondents, suggested that the position taken in those earlier letters and in submissions made to the Court on 12 December 2011 were incorrect. The thrust of the contention was that when the letters were written and the submission made asserting that no communication had taken place between MWREDC and the Department concerning the relevant matter, the documents revealed that communications, earlier denied, had in fact occurred. Other matters canvassed in that letter concerned aspects of the redaction of the documents, issues in relation to the claim for legal professional privilege and other matters.
72 On 2 March 2012, McKays wrote to Kelly Legal in response to the letter of 27 February 2012 advising that the respondents were in the process of briefing other solicitors. The author said that the firm did not accept that there was any basis for concern as suggested in the letter of 27 February 2012 regarding issues of frankness concerning the October letters and submissions made to the Court.
73 On 5 March 2012, McKays advised Kelly Legal that Thynne & Macartney would act on behalf of the respondents.
74 On 8 March 2012, Kelly Legal wrote to McKays and continued to agitate the question of whether anything in the earlier correspondence or submissions suggested a lack of frankness.
75 On 8 March 2012, Kelly Legal wrote to Thynne & Macartney and pressed that firm to provide a detailed response to the earlier letter of 27 February 2012. A response was sought by 14 March 2012. A number of matters were taken up in that letter.
76 On 14 March 2012, Thynne & Macartney sent an email to Kelly Legal requesting the production of a copy of an email earlier referred to and a copy of that email was sent to Thynne & Macartney on 14 March 2012.
77 On 14 March 2012, Thynne & Macartney wrote to Kelly Legal confirming that the firm held instructions to act on behalf of MWREDC and Ms Pearse. The author said that the firm was not yet in a position to provide a response to all of the issues set out in the letter to McKays of 27 February 2012. However, before responding to that letter, the author set out the following interim position:
1. We advise that McKays Lawyers drafted a List of Documents for our clients with the documents disclosed to you. Unfortunately it was not finalised due to the further issues of disclosure raised by you in your letter of 27 February 2012. We are now urgently checking the draft List of Documents and liaising with our client regarding any further documents that may be in existence as outlined by you in your abovementioned letter. We will endeavour to get the List of Documents to you by 22 March 2012.
2. We are instructed that our client has attempted to provide thorough disclosure to date. In view of the comments in your [27 February 2012] letter, our client is again reviewing [its] various records. As set out above, we expect to be in a position to provide you with our client's List of Documents by 22 March 2012.
[emphasis added]
78 The author requested Kelly Legal to provide Thynne & Macartney with a copy of any List of Documents served on Kelly Legal by Crown Law on behalf of the Department.
79 On 21 March 2012, McKays wrote a further letter to Kelly Legal setting out further matters in relation to the earlier issues raised by Kelly Legal. It is not necessary to mention the content of that letter further.
80 On 22 March 2012, Thynne & Macartney sent an email to Kelly Legal. The author said that she was still in the process of finalising the List of Documents from the respondents. The author said that she had requested further documents the previous day from the respondents which had been located. MWREDC had attempted to send the documents to the author by email although unfortunately they had not been received electronically. The author said that these extra documents would need to be considered in order to finalise the List of Documents. The author apologised for the delay in completing the List and the delay in sending it to Kelly Legal. The author's expectation was that the List would be available earlier the following week.
81 On 28 March 2012, Kelly Legal wrote to Thynne & Macartney enclosing a copy of the McKays letter of 21 March 2012 and the response from Kelly Legal. The author pressed for a response to the Kelly Legal letter of 27 February 2012, a letter to McKays of 8 March 2012 and a letter to Thynne & Macartney of 8 March 2012. The letter enclosed a copy of the List of Documents provided by Crown Law.
82 On 5 April 2012, Thynne & Macartney sent an email to Kelly Legal in which the author said this:
I apologise for the delay in providing the List of Documents to you. I advise that I have prepared the List of Documents in this matter and sent same to my client to execute as a matter of urgency. I have copied the documents in readiness to serve on you when the signed List is returned to us.
83 On 12 April 2012, Kelly Legal again wrote to Thynne & Macartney pressing for the responses earlier mentioned. In that letter the author said this:
In view of the delay that has already occurred (noting that the existing Orders were made on 23 December 2011), please provide a full and substantive response (including your clients' list) by 4:00pm next Tuesday, 17 April 2012 together with copies of all documents by 4:00pm Friday, 20 April 2012 (in this regard assume that we will require a copy of all documents except those which have already been provided by McKays).
Could you also provide all relevant documents that have come into existence since the date of the original Orders in compliance with your clients' continuing obligations regarding discovery.
84 On 17 April 2012, Thynne & Macartney wrote to Kelly Legal enclosing a signed copy of the List of Documents of the first and second respondents together with copies of all documents referred to in the List. The author said that the original List had been sent to the Federal Court for filing and a sealed copy of the List would be served upon receipt of the document from the Court. The List is affirmed by Mr Westcott, Chairman of the Board of MWREDC.
85 On 18 April 2012, Thynne & Macartney responded by letter to Kelly Legal dealing with seven particular topics raised in the earlier correspondence of 27 February 2012 by Kelly Legal. As to the List, the author observes that Kelly Legal had been provided with the list and an affidavit verifying the documents. As to inadequate discovery, the author observed that the respondents had at all times attempted to provide thorough disclosure to Mr Mason although they did not initially realise that emails sending Board papers to Board members were discoverable as there is no additional information in the body of the emails sending out particular Board papers that fall within the scope of the orders. The author observed that the Board papers had been disclosed. The author also observed that in view of the comments of Kelly Legal, the respondents had reviewed the relevant records and had provided further documents disclosed in the List of Documents.
86 On 26 April 2012, Thynne & Macartney wrote to Kelly Legal in response to the letter of 12 April 2012. The author observed that a number of the matters had been addressed by the Thynne & Macartney letter of 18 April 2012. As to the question of the emails, the author said that the respondents had instructed the firm that all relevant emails had been disclosed and that there were no further emails. The author also said that the List had been lodged for filing on 17 April 2012 but that since the order contemplated the giving of discovery and not the filing of the List, the List had been returned to Thynne & Macartney. The letter enclosed two further emails in discharge of a continuing obligation to discover documents falling within the scope of the orders. Those documents were an email dated 14 October 2011 from Ms Pearse to Board members attaching Board papers and an email dated 9 December 2011 from Ms Woodman to Board members attaching Board papers.
87 On 4 May 2012, Kelly Legal wrote to Thynne & Macartney raising an issue about an apparent non-disclosure of an email by Ms Woodman to Ms Wright dated 18 October 2012.
88 In the applicant's supplementary submissions at page 4, the applicant accepts that by 15 April 2012 the respondents "had substantially complied with the order to give preliminary discovery". That concession was probably meant to date from 17 April 2012 being the date of the Thynne & Macartney letter enclosing the List. Two further emails were disclosed in the Thynne & Macartney letter of 26 April 2012.
89 Although the question of the time for compliance will be addressed shortly, it should be noted in this chronology that the particular focus of the applicant's criticism of the respondents' contended conduct of neglecting to comply with Order 1 in a timely way (apart from the failure to provide discovery by way of a sworn or affirmed List by the date for compliance) is the failure to give discovery of a series of emails that distributed either the Minutes of Board Meetings of MWREDC or Board papers to a pool of nominated addressees. The Board Minutes attached to the emails or Board papers (as redacted) had been disclosed from the outset (unverified) but the covering emails formally attaching the documents and thus representing the method of distribution had not been disclosed on the footing that they contained no new information or commentary. Examples drawn from "FMM6" to the affidavit of Mr Mason are the emails at pp 119, 135, 174, 242 and 340.
90 The order of 23 December 2011 was entered on 16 April 2012, the day before Thynne & Macartney provided the applicant with the verified affirmed List of Documents.
91 The order seems to have been served on 23 April 2012 although, as already mentioned, the respondents accept 19 April 2012 for the purposes of this application as the date of service. If the order was served on 23 April 2012, the time for compliance was 8 May 2012.
92 Order 1.2 requires disclosure of any email passing between MWREDC and the Department regarding payment by Mr Mason of any invoice or bill concerning his attendance at any activities associated with the MWREDC 2010 Trade and Investment Mission to the People's Republic of China or any of his subsequent dealings with MWREDC or Ms Pearse in connection with the 2010 Mission. To the extent that each email is an email between MWREDC and an addressee (among the many addressees in the group) who is an employee or representative of the Department, and the attachment addressees the nominated subject matter, the email falls within Order 1.2.
93 However, each email was ultimately disclosed once Thynne & Macartney had completed its review of the discovery with a view to completing and serving the List as verified by Mr Westcott.
94 I find that I am satisfied beyond reasonable doubt that an inference is open which I draw that by reason of the representation of the respondents by their solicitors and counsel in receiving the orders and reasons for judgment on 23 December 2011; in the solicitors engaging on 23 December 2011 with the applicant's solicitors on the categories of costs to be taken into account in determining a reasonable amount of security including the costs of the time to be taken by the respondents in locating the field of documents falling within the order; in McKays writing the letter of 19 January 2012 referring to the "instructions" of the respondents as to the amount of reasonable security having regard to the activities of, in part, the time the respondents would spend in locating each document and also the respondents' costs of taking legal advice on the scope of disclosure; in McKays writing the letter of 27 January 2012 reflecting the "instructions" of the respondents as to a reasonable amount for security in undertaking, in part at least, the respondents' tasks under the order of isolating the documents and the instructions of the respondents concerning confidentiality issues relating to "some of the documents required to [be] disclosed"; and in McKays writing the letter of 31 January 2012 explaining that the respondents had sought counsel's advice on discovery and proposed to do so further, that the respondents had been notified of the terms of the order either by reason of oral communications from their solicitors or telephone calls from their solicitors telling the respondents of the terms of the order and by the transmission of a copy of the order to them.
95 However, the earliest point in the chronology when such an inference of notification can be drawn beyond reasonable doubt is 19 January 2012 when the first letter was sent by McKays acknowledging that the respondents had engaged on the order and had given "instructions" as to aspects of it.
96 Accordingly, I find that the respondents were notified of the "terms of the order" for the purposes of rule 41.07(2) on 19 January 2012.
97 Orders 1 and 2 are expressly made "subject to Order 4" as to the resolution of the terms and conditions of security.
98 The question of when the order became unconditional turns upon the dealings between the law firms for their respective clients.
99 On 1 February 2012, Kelly Legal put a proposal for the resolution of the issue of security that had these elements: disclosure by 8 February 2012; Mr Mason deposits $2,500 in the trust account of his solicitors as security; Mr Mason's liability for the respondents' disclosure costs would be subject to the final result of the proposed litigation; and the disclosure costs, if relevant, ought to be agreed or taxed. That proposal was not accepted by the respondents. On 8 February 2012, they proposed disclosure of the documents within five business days of 8 February 2012 on the footing that Mr Mason provide security of $2,500 for the respondents' costs of disclosure. No other elements are contained in that counter-proposal. On 9 February 2012, Kelly Legal confirmed that the firm was holding $2,500 in trust on account of security and called for disclosure. That response is an acceptance of the counter-proposal from McKays of 8 February 2012.
100 I am satisfied beyond reasonable doubt that the order became unconditional on 9 February 2012.
101 Assuming for the moment that time commences to run (subject to the satisfaction of the conditional aspect of the matter) from the moment the respondents are "notified" of the terms of the order and they are thus taken to have been served at the time of notification, time commenced to run, in this matter, on 9 February 2012 because by that date the respondents had been notified of the terms of the order and the order had become unconditional. The time for compliance on this footing was a period within 14 days of 9 February 2012, that is, 23 February 2012.
102 Subject to [104] of these reasons, I am satisfied beyond reasonable doubt that the obligation on the part of the respondents to give discovery, on that footing, arose under the order on 23 February 2012 and no earlier than 23 February 2012.
103 On 15 February 2012, the respondents provided the applicant with the unverified bundle of documents containing most but not all of the documents falling within the scope of the order.
104 However, a further question arises in relation to determining the date for compliance with the order. Rule 41.07(2), as it applies on the facts of this case, gives rise to the result that by 19 January 2012 each respondent is "taken" to have been served with the order which became unconditional on 9 February 2012. The order so served, "constructively", is silent in its terms concerning the time for compliance. Rule 39.02 (not the order) fills the gap by providing that the time for compliance is a period within 14 days of service of the order. It is not clear to me that the trigger event for determining the time for compliance does not remain service of the order itself. Rule 41.07(2) creates the construct that the respondents are taken to be served for the purposes of establishing that each respondent knew, for enforcement purposes, the "terms of the order". But if the terms of the order do not contain the time for compliance, the time for compliance is fixed operation of the Federal Court Rules as 14 days from service of the order. I am not satisfied beyond reasonable doubt that the time for compliance was 23 February 2012 (in accordance with the assumption described in [101] of these reasons) rather than within 14 days from the date of service of the order. It seems to me that the proper construction of the Federal Court Rules gives rise to a time for compliance in the circumstances of this case, because the order itself is silent as to time, which is the later date, namely, a date 14 days from service of the order, with the obligation to be discharged within those 14 days.
105 On the assumption that the order was served on the solicitors for the respondents as the applicant contends on 23 April 2012 or alternatively on 19 April 2012 as the respondents contend, the time for compliance arose on 8 May 2012 or 4 May 2012 respectively with the result that it was not until the expiration of those dates, with the obligation undischarged, that the respondents contravened the order.
106 Let it be assumed however that the time for compliance with the order was 23 February 2012.
107 It can be no earlier than 23 February 2012.
108 It was not until 24 February 2012 that an undischarged obligation to give discovery according to the terms of the order would place the respondents in contravention of the order. A failure to comply with the terms of the order on 15 February 2012 does not place the respondents in contravention of the order.
109 The first charge charges each respondent with having "neglected to comply with Order 1 in a timely way". The particulars of the charge seek to explain the content of the charge by reciting that the respondents engaged in the conduct of providing an unverified bundle of documents comprising 227 pages on or about 15 February 2012 in purported compliance with the order. Assuming for the moment that "neglected" means "failed" to comply, the act of delivering 227 pages of documents to the applicant's solicitors on 15 February 2012 is not a failure on that date to comply with an order which allowed the respondents until 23 February 2012 to comply. It might be said in a relevantly framed charge that the respondents are in contempt of Court by failing on or about 24 February 2012 to give discovery of all documents required by Order 1 by giving discovery of only 227 pages rather than all documents required by Order 1, but the conduct of 15 February 2012 cannot be a proper particular of a failure to comply with an order that fell for compliance by 23 February 2012.
110 The second particular concerns only the fourth respondent.
111 The third particular of neglecting to comply with Order 1 in a timely way is that the respondents did not provide a verified List of Documents until 17 April 2012 and only provided the documents referred to in the List on or about 18 April 2012. The respondents were required by the Rules of Court to give discovery by a particular method, namely, the production of a verified List of Documents. On the assumption that the charge is that the respondents are "in contempt of Court" by "failing to comply" with Order 1 (a matter addressed later in these reasons) by failing to provide a verified List of Documents until 17 April 2012 and copies of the documents in the List until 18 April 2012 whereas Order 1 required discovery by verified List and production of documents by 24 February 2012, particular 3 is a proper particular of that charge so framed according to the assumption made.
112 Particular 4 is simply a reference to correspondence passing between the solicitors for the applicant and the respondents.
113 Particular 5 refers to the "purported discovery" on or about 15 February 2012. Particular 5 of the neglect in complying with Order 1 in a timely way recites that the purported discovery of the respondents on or about 15 February 2012 omitted documents discovered by the State of Queensland on or about 15 February 2012. Particular 5 is probably attempting to particularise the charge as a failure by the respondents to comply with Order 1 by failing to give discovery of documents in the possession or control of the respondents not discovered but identified in the discovery of the State of Queensland as documents or copies of documents necessarily in their possession or control. Particular 5 however is framed as a general omission in the discovery of the respondents of documents discovered by the State of Queensland. Further, particular 5 focuses upon conduct on the part of the respondents on or about 15 February 2012 which is a date prior to 23 February 2012. Any act of the respondents on that date is not a failure to comply with an order that fell for compliance by 23 February 2012.
114 Particular 6 is a reference to correspondence relating to the omissions the subject of particular 5.
115 Particular 7 identifies 15 documents omitted from the "purported discovery" on or about 15 February 2012 the subject of particulars 5 and 6. Particular 7 is necessarily a further particular of conduct said to have occurred prior to the time for compliance with the order.
116 The second charge charges each respondent with having "represented on or about 15 February 2012, through your former lawyers, McKays Solicitors, that you had given discovery in compliance with Order 1 (other than privileged or confidential material), whereas that was not the case".
117 The second charge is that each respondent made a representation on or about 15 February 2012 that they "had given" discovery in compliance with Order 1 whereas the discovery so given was not in compliance with Order 1. Again, the second charge focuses upon the conduct of 15 February 2012 of providing the applicant's solicitor, through McKays, with a bundle of documents not fully answering Order 1. The second charge however does not address a contended failure to comply with the obligations arising under Order 1 at the moment in time when time for compliance arose.
118 Particular 1 of the representation is the provision of the unverified bundle of 227 documents on or about 15 February 2012 in purported compliance with the order.
119 Particular 2 goes to the inadequacy of the discovery made on 15 February 2012 in that the verified List of 17 April 2012 comprised 406 documents whereas the earlier discovery comprised 227 documents.
120 Particular 3 recites that the purported discovery of 15 February 2012 omitted documents discovered by the State of Queensland on 15 February 2012.
121 Particular 4 is a reference to the correspondence passing between the solicitors for the applicant and the respondents.
122 Particular 5 identifies 15 documents omitted from the documents in the bundle provided on 15 February 2012 but included in the List of 17 April 2012.
123 Particular 6 asserts (as a particular of the charge) that the misrepresentation of compliance on 15 February 2012 was contumelious in that the misrepresentation occurred against the background of representations made earlier. Particular 6 contains three sub-particulars reciting the earlier representations.
124 The first is that McKays Solicitors on 14 October 2011 wrote to Kelly Legal stating:
We are instructed that REDC did not write to [the Department] about the alleged debt of $330.00 which answers the matters set out in your letter. …
[emphasis added]
125 The second is that McKays Solicitors on 21 October 2011 wrote to Kelly Legal stating:
We are instructed to reply for [REDC] and its Chairman and Chief Executive Officer that [REDC] has not contacted [the Department] at all about the alleged debt of $330.00. …
[emphasis added]
126 The third is that by written and oral submissions to the Court in the course of the hearing of the preliminary discovery application, the respondents represented by their counsel that there were no relevant documents susceptible of discovery for the purposes of that application by asserting in the course of the hearing on 12 December 2011 that:
Further the limited evidence available would suggest that as the respondents did not send any letter to [the Department], the factual premise upon which any (misconceived) claim could possibly be based is not made out. …
127 The particulars recite that that submission was supported by a footnote which made reference to the letters from McKays to Kelly Legal dated 14 October 2011 and 24 October 2011. Further, the particulars recite that at the hearing on 12 December 2011 counsel for the respondents represented that there had been "no written communications between the first and second respondents and the [Department]". The particulars recite that the information contained in the two letters was "patently false". Counsel for the respondents is said to have made the representation of "no written communications" by making reference to a particular single email which was relied upon by counsel as a basis for putting to the Court that an inference might be drawn "as to why a letter wasn't sent" [emphasis added]. The particulars recite that the Court responded by observing that the particular email was tendered on behalf of MWREDC and Ms Pearse "as an explanation as to why the letter wasn't written to [the Department]" [emphasis added].
128 The submissions by counsel for the respondents as framed by the particulars of the charge are directed to whether a letter was sent by MWREDC (or Ms Pearse) to the Department concerning matters arising in connection with the issue of money said to be owing by Mr Mason (as a public servant) to MWREDC in connection with aspects of the 2010 China Trade Mission.
129 An email was tendered by counsel for the respondents as supporting an inference that might be drawn about whether such a letter was sent or not or the reasons why such a letter was not sent. The references to a letter that might or might not have been sent to Mr Mason's employer concerned a contended threat by MWREDC to take up the issue of the unpaid debt with senior officers of the Department in a disciplinary way. Irrespective of the merits of that question, the focus of the submission by counsel was whether a discrete letter, concerning a reference of the debt issue, had been written or sent by MWREDC to senior officers of the Department. The reference by counsel and the response of the Court was concerned with whether such a letter may or may not have been written. The two letters from McKays of 14 October 2011 and 21 October 2011 referred to in counsel's submissions concern instructions from the respondents that MWREDC did not write to the Department or contact the Department about the alleged debt. It is true that the emails initially undisclosed by the respondents but ultimately disclosed in the List of Documents and produced to Mr Mason show that emails were sent to a large cluster of individuals which included addressees of the Department and that attachments to those emails contained Minutes of Meetings of the Directors (or Board papers) of MWREDC which made reference to issues concerning the controversy between MWREDC and Mr Mason about the contended debt. However, those attachments deal generally with the field of issues reflected in the Minutes or the papers. The discovered documents do not show that an entirely separate discrete letter, submission or email was written dealing specifically with the question of a reference of the debt claims by MWREDC against Mr Mason, to the Department for action to be taken by the Department.
130 That is not to say that the emails attaching documents containing references to the debt issue among other topics are not discoverable nor that they do not reflect "contact" as between MWREDC and the Department, but the focus of the submissions by Mr Collins, to the extent that the applicant seeks to particularise the charged misrepresentation as contumelious by reference to the earlier statements, was whether a discrete step, at that time described as a letter (but also comprehending an email or other communication), was written and sent by MWREDC to the Department specifically addressing the question of a reference of the disputed debt issue to the Department, to be taken up as between the Department and Mr Mason.
131 The second charge therefore is a charge of having made on 15 February 2012 a contumelious misrepresentation that the documents disclosed on 15 February 2012 were all of the documents discoverable in compliance with Order 1. The provision of the "enclosed bundle of discoverable documents pursuant to the Order" by the McKays letter of 15 February 2012 subject to the redaction of particular content and questions of confidentiality (with a List of Documents to also be supplied), implicitly represented to the applicant that the respondents had genuinely turned their minds (Ms Pearse and Mr Westcott) to the terms of the order (and had probably taken legal advice on the scope of the order) and proffered the disclosed bundle of documents as the collection of documents that properly answered the order.
132 The provision of the documents under the terms of the letter of 15 February 2012 is not a representation that there are no other documents that might be required to be produced by reason of the order. The implicit representation is that proper and genuine enquiries have been taken to understand the scope of the orders and to identify and produce those documents required to be produced under the order. Discovery is a continuing obligation and it goes without saying that persons, subject to an order for discovery, might fail to disclose documents which properly fall within the scope of the relevant order. That might happen for reasons of accident or inadvertence or because of the complexity of the order or because continuing enquiries reveal other lines of enquiry or sources of documents which when exhausted result in the identification of further documents. It might simply be that those persons properly discharging their obligations in good faith make an error of judgement about whether particular documents are required to be disclosed. It might also be that particular documents may or may not fall within the scope of the order and a judgement is made that the particular documents are not required to be disclosed. That judgement might be open but simply shown to be wrong.
133 It does not follow that because further documents come to light or are required to be disclosed that those persons who have undertaken discovery and who have failed, in the result, to produce at the outset all of the documents required to be produced, are necessarily in contempt of Court. If the evidence demonstrates that the conduct of the individuals bound by the order shows wilful disregard of the order, truly wilful disobedience or refusal to comply with the order, entirely different questions arise. If, however, the evidence shows that the persons bound by the order have made genuine attempts to produce a body of documents that they believe satisfies the order; independent lawyers have been appointed to review the adequacy of the discovery given by those persons; further discovery and a verified List of Documents has been given; and the List of Documents produced in answer to the order provides substantial compliance with the order, no question of a misrepresentation arises.
134 The question of the adequacy of the discovery might be brought before the Court for further determination if, for example, discovery by the State reveals non-discovery of documents by the respondents that ought reasonably to have been disclosed in their List.
135 I am not satisfied beyond reasonable doubt that the conduct of the respondents on 15 February 2012 constitutes a contempt of Court as charged by charge 1. I am not satisfied beyond reasonable doubt that the conduct of the respondents constitutes a representation as charged by charge 2 or a contumelious misrepresentation as charged and particularised.
136 By 15 February 2012, the respondents had provided an unverified bundle of documents which contained most of the discoverable documents for the purposes of the order. Some of the documents had not been discovered and in particular the contentious matter of the covering emails. A List of Documents was to be provided. By 5 March 2012, the solicitors for the applicant knew that Thynne & Macartney had been appointed to represent the respondents and on 14 March 2012 Thynne & Macartney wrote to Kelly Legal setting out the interim position of the respondents.
137 Thynne & Macartney in the letter dated 14 March 2012 said that the it was reviewing the List of Documents having regard to the particular issues raised by Kelly Legal and that steps would be taken to try and provide the List in final form as reviewed by 22 March 2012. On 22 March 2012, Thynne & Macartney contacted Kelly Legal and said that the process of review was still continuing. Thynne & Macartney wrote to Kelly Legal again on 5 April 2012 about the progress of a completed List of Documents. The firm again wrote to Kelly Legal on 12 April 2012 advising Kelly Legal of the current position. On 17 April 2012, the affirmed List was provided to Kelly Legal.
138 On 26 April 2012, two further emails were provided to Kelly Legal.
139 On 14 May 2012, Mr Mason filed the interlocutory application seeking orders in punishment of the respondents for contempt of the order of 23 December 2011.
140 I am satisfied that although the respondents failed to provide an affirmed List of Documents by 23 February 2012 (assuming that the obligation crystallised at that date), genuine efforts were being made to isolate the documents falling within the scope of the order and provide copies of those documents to Mr Mason. An attempt to do so occurred in an unverified way on 15 February 2012. A List was to follow. That attempt was incomplete as the covering emails demonstrating communications between MWREDC and the Department had not been disclosed as already described. However, the emails in question were ultimately all produced and each email is identified in the verified List of Documents completed by Thynne & Macartney and provided to the applicant.
141 There can be no suggestion that Mr Mason has been deprived of the benefit of the order or deprived of access to the documents falling within the scope of the order. He has the documents and had them well before the end of April 2012. The obligation cast upon the respondents was a continuing one and to the extent that it was incomplete having regard to the objections raised by Kelly Legal, further steps were taken to isolate any additional documents and ultimately the entire process of compliance with the order including the completion of a fully reviewed List of Documents was undertaken by an incoming law firm bringing fresh eyes to the entire process.
142 Yet, the applicant contends that the failure to give discovery in a timely way represents neglect on the part of the respondents giving rise to contempt of the order.
143 The following further matters should be noted.
144 First, as to the framing of the charges, I am not satisfied that charge 1 properly frames a precise charge of contempt of Court by reference to the Statement of Charge and particulars, of an omission of failing to do an act or thing in wilful disobedience of the order. Framing the charge without asserting, within the charge, a "contempt of Court"; by reference to the word "neglected" without identifying the content of the failure; by reference to "in a timely manner" without identifying the moment in time when the contemptuous failure is said to have arisen; and particularly by reliance upon conduct prior to 23 February 2012, renders the charge fatally flawed. The charge ought to be dismissed.
145 The second charge is framed as a contumacious misrepresentation. For the reasons already identified I am not satisfied that the conduct relied upon contained a misrepresentation in the terms charged. The second charge ought to be dismissed.
146 Second, the general powers contained in the Federal Court Rules 2011 to dispense with compliance with the Rules of Court and the power to make any order the Court considers appropriate, do not provide a proper basis for dispensation of the requirements designed to provide a protective balance to the persons charged with contempt of Court.
147 Third, the circumstance that the State elected to quickly resolve the amount of the security at $500 and to promptly provide a List of Documents and copies of documents within the description in the order of 23 December 2011 does not assist in determining questions of when the issue of security was resolved with the charged respondents, the precision or content of the charges made against those respondents, the assessment of the conduct of the respondents or the relevance of the events leading to the intervention of Thynne & Macartney or the consequences for the application of substantial compliance with the order by the respondents by 17 April 2012.
148 Fourth, the applicant accepts by para 2.2 of his reply submissions that the "time for compliance with the orders made on 23 December 2011 was 8 May 2012" by operation of rule 39.02. The applicant contends that although this is the "technical" position under the Federal Court Rules, the substance of the matter involves non-compliance with the order in a timely way.
149 Fifth, the time for compliance with the order of 23 December 2011 was either 4 May 2012 or 8 May 2012 rather than 23 February 2012. The conduct in February, March and April could not put the respondents in contravention of the order. By 17 April 2012, there had been substantial compliance and the issue of compliance and discovery had been resolved in a remedial sense inter-parties by 17 April 2012. Substantial compliance by 15 April 2012 is conceded at page 4 of the applicant's supplementary submissions.
150 Sixth, the applicant nevertheless brings a contempt proceeding filed on 14 May 2012 well after the respondents had complied with the orders, "to draw to the Court's attention conduct which falls short of what the Court is entitled to expect of [a] party when subject to Court orders …". However, a party is bound to comply with an order according to its terms and that notion involves analysing those terms; determining when the obligation falls for compliance; determining whether the order is conditional; determining whether time for compliance runs from service; determining the scope of the precise conduct said to constitute contempt of the Court; determining whether the conduct is in any event explicable as having been accidental or unintentional; and determining whether the conduct has been purged by compliance. In this case, any failure to comply with the order (which had not fallen for compliance on 17 April 2012) was, in any event, purged.
151 Seventh, the applicant places emphasis upon the McKays letters of 14 and 21 October 2011 and counsel's submissions as particulars of contumacious conduct in making patently false representations about communications with the Department. The emails were disclosed to Mr Mason and recited in the List of Documents provided by Thynne & Macartney. Those emails ought to have been disclosed as part of the 15 February 2012 bundle if that disclosure was to amount to final discovery (recognising of course that Thynne & Macartney gave final discovery on 17 April 2012) but no obligation arose at that time to disclose anything. That obligation fell in on either 4 May or 8 May 2012.
152 Eighth, the applicant places particular emphasis upon an inference of wilful disobedience at 15 February 2012 by the respondents giving discovery of 227 pages of documents when the State disclosed 609 pages of documents (see "FMM4"). However, pages 310 to 609 of "FMM4" are simply an exact duplicate of pp 10 to 309 of "FMM4" as duplicate documents were held by the State. It follows that no inference ought to be drawn of apparent wilful disobedience simply by reason of a comparison of the sheer number of pages as between 227 and 609 in a comparative sense. The Department's discovery is in truth 299 pages. It may well be that the State had in its possession or power documents to be disclosed under the order which were not in the possession or power (or copies of them) of MWREDC and Ms Pearse.
153 For all these reasons, the interlocutory application must be dismissed with costs. I am not satisfied that the costs order ought to be on an indemnity basis.
154 By para 3 of the application, Mr Mason seeks an order that the costs order in his favour of 23 December 2011 be varied so as to order the respondents to pay those costs on an indemnity basis. I am not prepared to vary the earlier order and in any event the order having been made and not made the subject of an appeal against the exercise of the discretion, I am not satisfied that there s a proper basis for making such an order.
I certify that the preceding one hundred and fifty-four (154) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.