Menzies v Paccar Financial Pty Ltd

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] HEADNOTE [This headnote should not be read as part of the judgment] On 4 May 2015 the appellants, Ian and Colleen Menzies, were found guilty of contempt, following a failure to deliver up two prime movers and four trailers to the respondents, Paccar Financial Pty Ltd, in compliance with final orders of the Court directing that delivery up. The appellants were subsequently sentenced for fixed terms of imprisonment of six months and two months respectively. They appealed from those findings of contempt and also sought a stay of execution of the committal orders of the primary judge. In the course of that motion being heard in the Court of Appeal, Mr Menzies informed the Court that he had decided to arrange to have the relevant vehicles taken to a place where they could be collected by the respondent. The appellants' motion was stood over to allow for that to occur, and the vehicles were subsequently delivered up. At the adjourned hearing of that stay application, counsel appearing as amicus curiae for the appellants applied under Supreme Court Rules Pt 55 r 14 for orders discharging and releasing each of them from imprisonment. The issue for the Court (Meagher JA) was whether there were changed circumstances which justified orders for release. The Court, exercising the power under that rule, was satisfied that there were such circumstances and made orders releasing each appellant. Those orders were made in the underlying proceedings in which the warrants for committal had been issued. Held: (1) Supreme Court Rules Pt 55 r 14 confers power on the Supreme Court to "re-visit and review" a decision to imprison a person for contempt. It permits the contemnor to have the Court review the question of punishment and sentencing in light of some change in the relevant circumstances: [17]-[20] Young v Registrar, Court of Appeal [No 3] (1993) 32 NSWLR 262 applied (2) Notwithstanding that the contempts found to have been committed by each of the appellants were founded on different conduct, the Court was satisfied that both should be discharged from further imprisonment: [22]-[27].

Judgment

On 6 September 2016 Rothman J ordered that the appellants (Mrs Menzies named as first appellant and Mr Menzies as second appellant in the appeal from those orders) be sentenced to imprisonment for contempt (Paccar Financial Pty Ltd v Ian Menzies & Colleen Menzies (No 2) [2015] NSWSC 1622). The orders made were: (1) [Mr Menzies] is sentenced to a fixed term of imprisonment of six months, commencing 6 September 2016 and concluding 5 March 2017; (2) [Mrs Menzies] is sentenced to a fixed term of imprisonment of two months, commencing 6 September 2016 and concluding 5 November 2016.
The appellants filed an appeal from those orders and from his Honour's earlier findings of contempt (Paccar Financial Pty Ltd v Ian Menzies & Colleen Menzies [2015] NSWSC 501). Those findings were that each was guilty of contempt in failing to deliver up property, namely two prime movers and four trailers, in breach of orders of the court made in June 2013 (see [10] below).
That appeal is brought under s 101(5) of the Supreme Court Act 1970 (NSW) which provides that an appeal lies from any judgment or order of the Court in a Division in any proceedings "that relate to contempt (whether civil or criminal) of the Court or of any other court". Each appellant appeals from the finding of contempt. There is no ground of appeal directed to the severity of the punishment imposed by the primary judge on either of them.
The appellants also filed a motion for a stay of execution of the orders of the primary judge. That motion was first returnable on 26 September 2016. On that day Mr Harris of the Crown Solicitor's Office appeared as amicus curiae. Mr and Mrs Menzies were present by video link but not represented. There was discussion as to whether the appellants' application should be dealt with under the Bail Act 2013 (NSW). Reference was made to s 90(1) of that Act which provides that it does not affect any power or duty that a court has "to grant bail, or to grant relief in the nature of bail, for any contempt or alleged contempt". However that section does not apply to "a contempt or alleged contempt that constitutes an offence and proceedings for which may be commenced by way of information or complaint" (s 90(3)). There was also discussion as to whether this Court has power to grant bail, or otherwise stay the execution of committal orders, as part of its appellate jurisdiction conferred by s 101(5). In support of that position reference might be made to the High Court's reasoning in United Mexican States v Cabal (2001) 209 CLR 165 at [37]-[38]; [2001] HCA 60 and to the decision of Gummow J in Pelechowski v Registrar, Court of Appeal (1998) 72 ALJR 711 at [4].
Early in the course of the argument Mr Menzies informed the Court that he had decided to arrange for the vehicles to be taken to a place where they could be collected by the respondent (Paccar). To allow for all of that to occur, the hearing of the appellants' motion was stood over to 2.15 pm on 29 September 2016. At that adjourned hearing evidence was adduced that the two prime movers and the trailers had been collected by agents of Paccar from a place in Grafton, where they had been parked beside the road. The vehicles had then been secured and towed to a storage facility.
At the hearing on 29 September Mr S Brennan of counsel appeared as an amicus curiae, assisting the appellants. He submitted that in the circumstances orders should be made that each be discharged from further detention in the exercise of the Court's power under Supreme Court Rules 1970 (SCR), Pt 55 r 14 which provides: Where a contemnor is committed to a correctional centre for a term, the Court may order his discharge before the expiry of the term.
In support of that application evidence was led from each of the appellants. At the conclusion of the separate arguments put on behalf of each of them, I made the following orders and reserved my reasons for doing so. Those orders were made in the underlying proceedings in which the charges of contempt were made and not in the proceedings in the Court of Appeal or in the exercise of that Court's appellate jurisdiction: In proceedings 2015/171520, order: 1. That the defendant, Colleen Anne Menzies, be discharged and released from the correctional centre where she is presently imprisoned. 2. For the purpose of giving effect to order 1, revoke the sentence warrant dated 6 September 2016 in relation to the defendant's imprisonment. In proceedings 2015/171519, upon the defendant, Ian David Menzies, undertaking to the Court that he will make reasonable inquiries as to the whereabouts of the missing compliance plates to the two trucks and two of the four trailers and as to the whereabouts of any missing bull bars, bumper bars, radios and hand rails and delivers up any of those items which he obtains as a result of those inquiries within 14 days of 29 September 2016, order: 1. That the defendant, Ian David Menzies, be discharged and released from the correctional centre where he is presently imprisoned. 2. For the purpose of giving effect to order 1, revoke the sentence warrant dated 6 September 2016 in relation to the defendant's imprisonment.
What follow are my reasons for making those orders.
In the underlying proceedings Paccar sought a judgment for moneys owing by the Menzies as guarantors of moneys advanced by Paccar to Menzies Haulage Pty Ltd which purchased the vehicles and trailers. In separate proceedings the Menzies claimed damages from Paccar in respect of its alleged "groundless and unjustified" actions in prosecuting a creditor's petition against them.
Both of these proceedings were determined adversely to the Menzies (Paccar Financial Pty Ltd v Menzies; Menzies v Paccar Financial Pty Ltd (No 5) [2013] NSWSC 772). The final orders made on 13 June 2013 included that they deliver up the prime movers and trailers within 14 days. The appellants filed a notice of appeal on 21 June 2013 and by consent the orders requiring delivery were stayed until an interlocutory hearing before Leeming JA on 26 August 2013. To give Mr and Mrs Menzies the opportunity to deliver up the vehicles, on Paccar's undertaking that it would store and care for them until the determination of the appeal, his Honour extended the existing stay until 23 September 2013 with the consequence that those orders became effective and could be enforced from 24 September 2013 (Menzies v Paccar Financial Pty Ltd [2013] NSWCA 283). The Menzies' appeal from the orders made on 13 June 2013 was subsequently dismissed on 1 July 2014 (Menzies v Paccar Financial Pty Ltd (No 4) [2014] NSWCA 210). In the absence of compliance with the Court's orders, in September 2014 Paccar filed a notice of motion charging each of the Menzies with contempt.
The inherent jurisdiction of a superior court includes the power to punish summarily for contempt, whether civil or criminal: R v Metal Trades Employers' Association; Ex parte Amalgamated Engineering Union (1951) 82 CLR 208 at 241-242, 254. That jurisdiction of the Supreme Court of New South Wales extends not only to contempts of itself but also to dealing summarily with contempts of inferior courts: John Fairfax & Sons Pty Ltd v McRae (1955) 93 CLR 351 at 360. The underlying reason for the existence and exercise of this power is to uphold and protect the effective administration of justice including in lower tribunals: John Fairfax & Sons at 363; Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 106.
The existence of this jurisdiction, and there being a difference under the general law between civil and criminal contempt, is assumed by s 101(5) of the Supreme Court Act. A consequence of this is that effect must be given to that distinction in relation to the exercise of this Court's appellate jurisdiction notwithstanding that there are real difficulties in characterising some instances of contempt as civil rather than criminal: Hearne v Street (2008) 235 CLR 125 at [2], [21], [132]; [2008] HCA 36; Mudginberri at 107-108.
The primary judge identified the Court's power to punish Mr and Mrs Menzies for contempt as conferred or confirmed by SCR Pt 55 r 13, which relevantly provides: (1) Where the contemnor is not a corporation, the Court may punish contempt by committal to a correctional centre or fine or both. … (3) The Court may make an order for punishment on terms, including a suspension of punishment or a suspension of punishment in case the contemnor gives security in such manner and in such sum as the Court may approve for good behaviour and performs the terms of the security.
In Registrar of the Court of Appeal v Maniam (No 2) (1992) 26 NSWLR 309 at 314 Kirby P said of this rule that it was "declaratory of the Court's power of punishment and did not exhaust it". See also Attorney-General for New South Wales v Whiley (1993) 31 NSWLR 314 at 320; and as to the extent of that power under the general law, Mudginberri at [106]-[113].
In determining what punishment to impose, the primary judge proceeded on the basis that Pt 3 of the Crimes (Sentencing Procedure) Act 1999 (NSW) applied. By s 4(3), Pt 3 applies "to the imposition of all penalties imposed by a court, whether under this Act or otherwise". In doing so his Honour did not expressly consider whether the contempts charged and dealt with were criminal contempts or whether in dealing with those charges the Court was exercising criminal jurisdiction: see the definition of "court" in s 3(1); and cases such as Principal Registrar of the Supreme Court of NSW v Jando [2001] NSWSC 969 at [38]-[45] (Studdert J) and R v Dent [2016] NSWSC 444 at [52]-[54] (RA Hulme J) in which Pt 3 was applied in sentencing proceedings in relation to charges which were clearly criminal contempts, and not brought in relation to the enforcement of orders of the Court.
It was not submitted that the power under SCR Pt 55 r 14 is not available in circumstances where the contemnor has been committed to a correctional centre for a fixed term. As Kirby P observed in Young v Registrar, Court of Appeal [No 3] (1993) 32 NSWLR 262 at 282-283 the "reference in the rule to 'for a term' is clearly designed to permit discharge short of the service of a specified term". It confers that power in circumstances where the Court fixing punishment for a criminal contempt by a term of imprisonment might otherwise be functus officio: see Attorney-General v James [1962] 2 QB 637 at 641.
Of that power Kirby P also observed in Young v Registrar at 281: The rule … clearly contemplates discharge during the terms of imprisonment fixed by the Court which committed him to prison. It contemplates that the Court to which the discharge application is made will, in a sense re-visit and review the facts which have already been passed upon judicially by the Courts imposing the sentence of imprisonment. To that extent, it is not to the point to complain about the offence to principle of providing an effective "appeal" or "review" in a court of co-equal jurisdiction. Some form of "review" is contemplated by the Court to which the discharge application is made as contemplated by the Supreme Court Rules 1970.
And at 282: … the procedure for discharge is not available to demonstrate that the original sentence was too severe when imposed. That is the business of an appeal, if such exists. Discharge is to permit the convicted contemnor to ask for clemency, demonstrate contrition, and establish that the punishment suffered already is enough to vindicate the authority of the court, and to punish the contemnor for the contempt found.
Powell JA (at 292) considered that to support an order under this rule: … there should be placed before [the Court] evidence as to some change in the relevant circumstances since the making of the order for committal which makes it inappropriate - as, for example, because no good purpose will be served by detaining the contemnor further or, because the contemnor has purged his contempt [citations omitted] - that the contemnor be detained further.
Crowley v Brown [1964] 1 WLR 147 is a case in which a change in circumstances justified the discharge of the contemnor under a similar power. Mr Brown appealed his sentence imposed for contempt on the ground that it was excessive. The Court of Appeal was empowered to revoke the trial court's order of committal. In the course of the hearing of the appeal, which was not going well, his counsel applied for such an order on the basis that Mr Brown "being truly contrite, his contempt may be regarded now as purged" (at 151 per Harman LJ). That submission was accepted in circumstances where he acknowledged the seriousness of his offence and apologised for the conduct constituting the contempt.
Mr and Mrs Menzies gave evidence in support of their respective applications.
The primary judge, in his reasons for imposing a term of imprisonment on Mrs Menzies, described her conduct as follows ([2015] NSWSC 1622 at [43]): … the second defendant's conduct amounts to wilfully shutting her eyes and she has adopted the position of the first defendant by failing to take any steps to deliver the property to the plaintiff. This still remains her position. She proffers the explanation that the first defendant has not told her the trucks' location and she could not drive them even if she did know. Yet she does not suggest that she has asked him for the location of the property.
It is to be recalled that the contempt charged against Mrs Menzies was of failing to deliver up the trucks and trailers to Paccar. To establish a breach of such an obligation it would ordinarily be necessary to prove that it was within the power or control of the person to produce that outcome. In her evidence to this Court, Mrs Menzies maintained that she did not help her husband to hide the trucks or at any time know where they were. That was consistent with Mr Menzies' evidence, both before this Court and before the primary judge. Nevertheless, she apologised to the Court for anything that she had done which constituted a breach of the order for delivery up. It was obvious, watching Mrs Menzies give her evidence, albeit by video link, that her three weeks spent in jail was a particularly difficult and harrowing experience. I am satisfied that there is no good reason to subject her to any further imprisonment, either to vindicate the authority of the Court or by way of further punishment. It is apparent that she understands that the Court's orders should have been complied with and regrets that they were not. For these reasons I made the orders discharging and releasing Mrs Menzies from imprisonment.
Mr Menzies' position is quite different from that of his wife. He arranged for the trucks to be hidden and refused to disclose their whereabouts for a period of three years. As the primary judge observed his contempt was wilful, and for that reason a serious one. There were however mitigating circumstances. They included that earlier in his lifetime, Mr Menzies had suffered three traumatic brain injuries and been diagnosed with development disorder and acquired brain injury. Those injuries had resulted in an "inflexibility of thinking, abnormal obstinacy and lack of self-awareness". The primary judge found that these conditions explained his having a "lack of understanding of the seriousness of his contempt" ([2015] NSWSC 1622 at [31]-[32]).
Mr Menzies has now arranged for the trucks to be delivered up to Paccar. He has also apologised to the Court for his failure to comply with the order, on more than one occasion describing his conduct in not doing so as "stupid". Unprompted he also acknowledged that he should have accepted the judgment of the Court and arranged for the delivery up of the vehicles and trailers in September 2013, under the interlocutory regime proposed by Leeming JA. In addition it was obvious from comments he made during the hearings on 26 and 29 September 2016 that in the time he has been imprisoned he has suffered not only by reason of that fact but also because his wife has been in jail, essentially because of his conduct.
Paccar opposed the making of an order discharging Mr Menzies on the basis that there were items missing from the prime movers and trailers when delivered up. Although this opposition was not developed in argument, the suggestion was that the delivery up should not be treated as constituting complete satisfaction of the Court's orders. The missing items included compliance plates on the two prime movers and two of the four trailers and bull bars, bumper bars, radios and handrails said to be missing from one or both of the prime movers. Mr Menzies' evidence was that he did not remove any of those items or ask that anybody do so. He also stated that the place where the trucks had been in storage, one for a period well in excess of the three years in which the orders for delivery up remained outstanding, was readily accessible to persons who might not be known to him or acting in his interest. This evidence was not challenged during his short cross-examination on behalf of Paccar. In the course of that evidence Mr Menzies also undertook to make reasonable inquiries as to the whereabouts of the missing items, and to deliver up any items obtained as a result of those inquiries.
In the circumstances notwithstanding the quite different quality of the contempt committed by Mr Menzies, I was satisfied that he too should be discharged from any further imprisonment. He has surrendered the vehicles so as to comply with the Court's order, albeit significantly out of time. He has apologised for his contempt and been punished, including substantially by reason of the imprisonment of his wife. For these reasons I made the orders discharging and releasing Mr Menzies.

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