Nathan v Burness

Federal Court of Australia|2010-07-05|Before: Ryan J, Bromberg J

REASONS FOR JUDGMENT 1 The appellant is Kailai Nathan. The respondent, Paul Burness, is a trustee of the bankrupt estate of Mr Nathan. 2 By notice of appeal filed 1 July 2010, Mr Nathan appeals from the whole of the judgment of Burchardt FM given on 17 June 2010. On that day, Burchardt FM made the following orders: (1) Mr Nathan is found guilty of the commission of the contempt of this court, in that he has refused to obey a direction of the court to attend before Registrar Allaway and to comply with section 264C of the Bankruptcy Act, 1966. (2) Mr Nathan is sentenced to imprisonment for one month, commencing forthwith. (3) The matter be referred back to Registrar Allaway for further hearing and disposition. 3 The notice of appeal seeks an order that Mr Nathan be released from custody forthwith and lists an interlocutory hearing for today. At the hearing, Mr Nathan confirmed that he seeks an order that he be released on bail, pending the hearing of his appeal. Mr Nathan has been in custody since 17 June 2010. On 2 July 2010, Ryan J made orders requiring Mr Nathan to be brought before the Court for today's hearing. Unfortunately, those orders were not given effect. Mr Nathan has, however, appeared via video link. 4 Mr Nathan is not legally represented, but seeks legal representation for his appeal. The respondent appeared represented by Mr Begg. 5 In support of his application, Mr Nathan relied upon an affidavit made by him and dated 2 July 2010. In that affidavit, and before me today, Mr Nathan complains that, in the proceeding before the learned Federal Magistrate, no indication was given to him that he was being charged for and dealt with by the court for contempt of court.

the proceeding before the federal magistrate 6 I need to briefly set out the background to this matter. In doing so, I have had some regard to the transcript of proceedings before the Federal Magistrate and, also, to the reasons for judgment of the Federal Magistrate. Reasons for judgment were given orally on 17 June 2010. Written reasons are not yet published, but a draft of those reasons has been made available on the basis that it is an accurate record of the reasons delivered ex tempore. 7 On 9 December 2009, an application was made to the Federal Magistrates Court for the Registrar to issue a s 81 summons pursuant to s 81 of the Bankruptcy Act 1966 (Cth) ("the Bankruptcy Act"). On 10 December 2009, a summons for examination was issued requiring Mr Nathan to attend to be examined on oath under s 81 of the Bankruptcy Act. 8 On 17 June 2010, the summons for examination was before Registrar Allaway. Mr Nathan was in attendance. On that day, Registrar Allaway referred the matter before him to Burchardt FM. That, apparently, was done because it was said that Mr Nathan was refusing to comply with s 264C of the Bankruptcy Act. 9 Section 264C of the Bankruptcy Act provides as follows: (1) A person appearing before the Court, the Registrar or a magistrate for the purpose of being examined under this Act, or appearing as a witness before the Court, shall not: (a) refuse or fail to be sworn or to make an affirmation; (b) refuse or fail to answer a question which he or she is required to answer by the Court, the Registrar or the magistrate, as the case may be; or (c) refuse or fail to produce any books that he or she is required by the Court, the Registrar or the magistrate, as the case may be, or by a summons under this Act, to produce. Penalty: $1,000 or imprisonment for 6 months, or both. (1A) Subsection (1) does not apply if the person has a reasonable excuse. Note: A defendant bears an evidential burden in relation to the matter in subsection (1A) (see subsection 13.3(3) of the Criminal Code). (2) Nothing in this section limits the power of the Court to punish persons for contempt of court, but a person shall not be punished under this section and for contempt of court in respect of the same act or omission. 10 The Federal Magistrate's reasons for judgment include a finding that Mr Nathan refused to be sworn or give evidence. Those reasons, having dealt with various submissions made by Mr Nathan in relation to such refusal, include the finding that there was no reasonable excuse advanced by Mr Nathan for not complying with his obligations under s 264C of the Bankruptcy Act. Relevantly, the learned Federal Magistrate said: Under section 264C(2) of the Act, I have in a sense a choice of dealing with Mr Nathan either under the terms of the penalty provisions of the legislation or for contempt of court. Here and before me it is Mr Nathan's refusal to comply with my direction to him to comply with his obligations under section 264C that constitutes the misconduct. The actual failure to answer questions and the like took place before Registrar Allaway. In the circumstances it seems to me proper to deal with this matter as a matter of contempt. That is what it plainly is. I have directed Mr Nathan to comply with an imperative obligation under section 246C, and he has refused to do so. 11 The learned Federal Magistrate, in his reasons for judgment, went on to make it clear that he was addressing a contempt in the face of the court. The reasons go on to identify why his Honour considered that the contempt should be dealt with immediately, rather than be the subject of, a charge and a referral to another judicial officer. 12 The transcript of proceedings before the Federal Magistrate indicate that Mr Nathan was told by his Honour that he could be dealt with either pursuant to s 264C of the Bankruptcy Act or for contempt of court. It is not apparent from the transcript that prior to the reasons for judgment being delivered, Mr Nathan was informed that he had been charged with contempt and was being dealt with for contempt. 13 What is apparent from the transcript is that the learned Federal Magistrate directed Mr Nathan to attend before Registrar Allaway to be sworn, or make an affirmation, to answer such questions as are put to him and produce such documents as the court may require. Mr Nathan was asked whether he was prepared to comply with that direction. He did not, in terms, indicate whether he was or was not prepared to comply but, after a series of exchanges, his Honour took the view that Mr Nathan was refusing to carry out the direction made.

should bail be granted? 14 The jurisdiction of the Court to grant bail pending the determination of an appeal before the Court is not in doubt. The power to grant bail, pending the determination of an appeal, arises from s 59(1)(f) of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act") which gives the judges of the Court power to make rules relating to the custody of convicted persons, and under Order 52 rule 35(3) of the Federal Court Rules, the Court or a judge has power to admit an appellant to bail pending an appeal: Clarke v R [2000]FCA 171, per Miles J, with whom Finkelstein and Dowsett JJ agreed. 15 As the Full Court there set out at [3], the nature of the power was described by a Full Court in Chamberlain v The Queen (1983) 69 FLR 445. The principle well recognised at common law was there applied. The principle is that bail will not be granted pending the hearing of an appeal from a conviction and sentence, unless there are exceptional or special circumstances. 16 The Court also has power pursuant to s 29(1)(b) of the Federal Court Act to stay or suspend the operation of an order the subject of an appeal. 17 With those powers and principles in mind, I turn to consider whether there are special or exceptional circumstances in this case. 18 Mr Nathan was sentenced to one month's imprisonment. He has now served more than 18 days of that sentence. No date has yet been set for his appeal. It is apparent that he needs legal assistance and, no doubt, time to prepare his appeal. There is, it seems to me, a real chance that he will have served all or the majority of his sentence prior to the appeal being determined. In that sense, his appeal will be rendered nugatory or substantially so. 19 Those facts are similar to the facts considered by Fullagar J in Re Cooper's Application for Bail [1961] ALR 584. In that case, Fullagar J at 584 said: In this case I think there are sufficient circumstances which can fairly be regarded as exceptional to induce me to think that I ought to grant bail. The sentence is, perhaps, the main affirmative consideration in my mind. It is a very short sentence, namely, imprisonment for two months, and the applicant has already been in gaol for some months because he did not obtained bail, apparently for technical reasons before the trial, and if he remains in gaol pending the hearing of his application for leave to appeal, and perhaps his appeal, he may well have spent in gaol the full period of his sentence, so that success, on an appeal would not even alleviate his punishment. 20 That decision has been followed on many occasions, including by the Western Australian Court of Criminal Appeal in Roddan v R [2002] WASCA 87, a decision of Pidgeon, Wallwork and White JJ. In that decision, White J, with whom the other members of the Court of Criminal Appeal agreed, said: Exceptional circumstances will be shown if the applicant will have served all or the majority of the custodial portion of his sentence prior to the appeal being determined, Re Cooper's Application for Bail [1961] ALR 584. 21 It seems to me that the shortness of the sentence and the likelihood of any appeal being rendered nugatory or substantially so is a most weighty consideration in this matter. There are, however, other matters that I will address, as did Fullagar J in Re Cooper's Application. 22 The first is the merit of the appeal. I do not propose to canvass in any great detail the prospects of success on the appeal. I do, however, take the view, on the material that I have seen, that there may well be merit to the appeal. 23 In that respect, there are questions raised as to, first, whether Mr Nathan was properly made aware that he was charged with contempt and accorded a proper opportunity to deal with such a charge. Secondly, there are questions raised as to whether what occurred before the learned Federal Magistrate could constitute contempt in the face of the court. In that respect, I note that Mr Nathan was not refusing to give evidence or to abide by any obligations he had under the Bankruptcy Act in the proceeding before the learned Federal Magistrate but, at best, had indicated a refusal to abide by a direction that he give evidence before Registrar Allaway. 24 I am at least satisfied, as was Fullagar J in the matter before him, that the appeal is not frivolous. 25 Furthermore, there is nothing before me to suggest that the appellant is a person of bad character or that he presents as a danger to the community (should he be released) or that there is any real danger of him absconding (should bail be granted). 26 I am prepared to grant bail to Mr Nathan, subject to particular conditions being met and subject to Mr Nathan giving particular undertakings. As to those matters, I will hear further from the parties. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromberg.

Federal Court of Australia Act 1976(Cth)ss 59(1)(f), 29(1)(b)

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