Plaintiff v Defendant

1 While his practising certificate was suspended and his law practice was under external intervention by a manager appointed by the Victorian Legal Services Board ('the Board'), in November 2020, Glenn Thexton paid a locksmith to change the locks of the premises from which his law practice was conducted in Victoria (the 'Premises'). Changing the locks prevented the appointed manager from having access to the files of the law practice. The changing of the locks occurred after this Court had ordered, on 14 October 2020, that Mr Thexton be restrained from obstructing the manager in performing his functions ('the Order').

2 By summons filed 12 April 2021 ('the Summons'), the Board applied for Mr Thexton to be punished for contempt of court.[1] For reasons published on 21 June 2021,[2] I found Mr Thexton guilty of contempt for having obstructed the manager as charged under Charge 1 of the Summons. A second charge of contempt, Charge 2, was dismissed. Charge 1 was in these terms:

In breach of paragraph 3 of the Orders, the defendant obstructed the Manager exercising his functions as manager within the meaning of s 364 of the Uniform Law.

Particulars

Paragraph 3 of the Orders restrained the defendant from obstructing the Manager exercising his functions as manager within the meaning of s 364 of the Uniform Law. In breach of that order, the defendant caused, induced or procured the locks at the Premises to be changed.

3 On 28 June 2021, after hearing submissions on penalty, I made orders that:

1. Glenn Thexton is adjudged in contempt of this Court, in that contrary to paragraph 3 of the order made by this Court on 14 October 2020, Glenn Thexton did obstruct the Manager exercising his functions as manager, and is convicted and committed to prison for 30 days.

1. The order of imprisonment under paragraph 1 of this order be wholly suspended for a period of 30 days.
2. A warrant of committal to prison shall not be issued until further order of the Court.
3. Charge 2 of the summons filed by the plaintiff on 12 April 2021 against the defendant be dismissed.
4. The defendant pay 75% of the plaintiff's costs of and incidental to the application by summons filed 17 December 2020 and 12 April 2021, including any reserved costs, on an indemnity basis.

4 In making those orders, I announced that I would publish my reasons subsequently. These are my reasons for penalty. These reasons for penalty assume familiarity with the facts set out and findings made in the contempt reasons, and the terms used therein.

5 Part 4 of Order 75 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) ('Rules') applies where a defendant is guilty of contempt of court. Where the defendant is a natural person, the Court may punish for contempt by committal for prison or fine or both[.]33 Rule 75.11(1) of the Rules. Further, when the Court imposes a fine, it may commit, or further commit, the defendant to prison until the fine is paid4[4]and it may make an order for punishment on terms, including a suspension of punishment.5[5]

6 Where the breach of an order is casual, accidental or unintentional, the Court may exercise its discretion to impose no penalty. Conversely, where the breach is contumacious, the contempt will be treated as criminal rather than civil. Further, where contempt is considered criminal, a Court may record a formal criminal conviction and is more likely to impose a severe penalty, including imprisonment.[6] While a sentence of imprisonment is available in cases of civil contempt, it is rarely considered appropriate.[7]

7 The law has traditionally distinguished between civil and criminal contempt. Although a contempt proceeding under Order 75 of the Rules is civil, the Court of Appeal in Sidebottom v The Queen[8] stated that proceedings seeking imprisonment or a fine for contempt must 'realistically be seen as essentially criminal in nature'.[9] Thus, the charge must be proven beyond reasonable doubt. The Court further explained:

In context, the distinction between civil and criminal contempt appears to be that a civil contempt involves the breach of an undertaking in civil proceedings, whereas a criminal contempt involves a contempt in the face of the court or an interference with the course of justice. Additionally, however, disobedience or breach of an undertaking will amount to a criminal contempt 'if it involves deliberate defiance or, as it is sometimes said, if it is contumacious'. The basis of the distinction between civil and criminal contempt is said to lie in the difference between proceedings which are remedial or coercive in the interest of the private individual and proceedings in the public interest to vindicate judicial authority or maintain the integrity of the judicial process, although the 'differences upon which the distinction between civil and criminal contempt is based are, in significant respects, illusory'.[10]

8 In CFMEU v Grocon Constructors (Victoria) Pty Ltd & Ors[11] ('Grocon'), the Court of Appeal conducted an extensive survey of authorities to ascertain the state of the law of contempt.[12] The Court noted that there had been a blurring of 'any bright line of distinction' between civil and criminal contempt constituted by breach of court orders.[13] Irrespective of any ongoing distinction between them, the Court observed that the types of punishment available for civil and criminal contempts is broadly the same.[14] Nonetheless, courts have continued to 'draw the elusive distinction between "punitive" and "protective" proceedings'.[15]

9 In Primelife Corporation Ltd v Newpark Pty Ltd[16] ('Primelife'), Nettle J emphasised that for a civil contempt a party is not liable to be punished for the contempt '... unless the contempt is proved by strict proof beyond reasonable doubt.'[17] His Honour also observed that:

(a) the aim of contempt sanctions in civil proceedings is primarily coercive or remedial, but it is recognised that a punitive aim is warranted to vindicate the authority of the court;[18]

(b) the only question was whether it was necessary to impose some additional sanction in order to vindicate the authority of the court, which is to say to bring home to the defendant that he or she may not flout the authority of the court with impunity, and to bring home to others the importance of complying with the court's orders;[19] and

(c) any factors relevant to penalty that may be considered aggravating require proof beyond reasonable doubt.[20]

10 In Hera Project Pty Ltd v Bisognin (No 2)[21] ('Hera 2'), Champion J held that, while it is generally accepted that disobedience of a court order will usually be civil contempt, it may be a criminal contempt where:

(a) the contempt is contumacious; or

(b) the proceeding serves a punitive purpose of punishing a past breach, rather than a remedial purpose of coercing obedience with the order.[22]

11 Consistently with what the Court of Appeal said in Grocon,[23] Champion J said further that a wilful breach may be considered contumacious where, for example:

(a) the contemnor knows the breach is prohibited and has no reasonable belief that it can be excused;

(b) the breach involves perverse obstinate resistance to authority; or

(c) there is a direct intention to disobey the order.[24]

12 His Honour further explained that the purpose of punishing for contempt was to uphold and preserve the orderly administration of justice, with the principal aims toward that purpose including specific deterrence, general deterrence and denunciation.[25] Distilled from the authorities, Champion J helpfully listed relevant considerations which may be taken into account, including:

(a) the nature and circumstances of the contempt;

(b) the actual consequences of the contempt;

(c) the effect of the contempt on the administration of justice;

(d) the contemnor's personal circumstances, antecedents and financial means;

(e) the contemnor's culpability;

(f) the contemnor's reasons for his or her conduct;

(g) the need to deter the contemnor and others from repeating the contempt; and

(h) whether the contemnor has exhibited general contrition and made a full and ample apology.[26]

What purpose does this contempt application seek to serve?

13 In so far as the purpose for which the contempt application is made is relevant for determining whether a contempt proceeding is criminal or civil, it is pertinent in Mr Thexton's case to observe that the management of his practice terminated in February 2021, more than two months before the Summons was filed. As the evidence revealed, the Board is in the process of applying to have the Law Practice wound up in court.

14 The purpose of charging Mr Thexton with contempt, in April 2021, for having disobeyed the Order restraining him from obstructing the manager of the Law Practice, logically, could only have a punitive purpose. There is no real role for any penalty imposed to coerce Mr Thexton into obeying the Order, being an order which no longer has any practical force.

Was Thexton's breach of the Order 'contumacious'?

15 The Board submitted that Mr Thexton's contempt in relation to the manager is a civil contempt which was contumacious (which should render it a criminal contempt).

16 Mr Thexton argued that, because he was seeking to litigate the Board's decision to suspend his practising certificate, the Board's appointment of a manager, closure of his legal practice and bringing these contempt proceedings should all be seen as an example of a party to civil proceedings (ie the Board) improperly putting pressure upon another (ie Mr Thexton) to withdraw those civil proceedings.

17 I reject Mr Thexton's argument. I am satisfied, beyond reasonable doubt, that Mr Thexton knew that changing the locks would amount to obstructing the manager and would therefore breach the Order. Despite his argument that his conduct should be viewed in the context of a 'civil' dispute with the Board, I find that he did not have a genuine belief that his conduct could be so excused. I am persuaded that his changing of the locks involved obstinate resistance to the Court's authority - a conclusion reinforced by the manner in which he conducted his defence and his plea hearing - and is properly to be described as contumacious.

18 On the conclusions that I have reached about the purpose of the application and the nature of Mr Thexton's breach I find that his contempt is a criminal contempt.

19 I now turn to the various matters relevant to penalty in this case.

20 The Board submitted that Mr Thexton's contempt should be regarded as serious, comprising a breach of orders obtained by the regulator in its pursuit of the protection of the public. Mr Thexton's conduct not only interfered with the judicial process, it also interfered with the performance of the Board's statutory and protective functions. Until recently, Mr Thexton was a practising legal practitioner, and the importance of compliance with court orders - and the statutory functions of the regulator - is a matter with which he should be very familiar.

21 Mr Thexton did not make any written submission on this point. In oral submissions he continued to seek to downplay his role in the obstruction of the manager by asserting that it had not been his idea, initially, to change the locks and that, once the locks were changed, it was the landlord's recalcitrance, not Mr Thexton's, that was the operating reason for the manager being held out of the Premises.

23 The Board submitted that in relation to the Premises, the manager had been hindered in his performance of a role to which he had been appointed in order to ensure the protection of the public. The Board conceded that the manager had been delayed for a relatively short time (ie four business days) but submitted, however, that this was not to the point. The Board contended that the clients whose files had been left behind locked doors had endured a period of time without legal representatives handling their matters or in which their legal representatives' access to potentially relevant documents of the files had been impaired.

24 Mr Thexton pointed out that the Board had produced no evidence that locking out the manager had caused any risk to the clients of the Law Practice. He further argued that the 'dispute that arose with a third party Landlord' has not been said to have had an impact beyond that of a trivial nature. To support this, by reference to the manager's fee invoice to the Board he submitted that the manager had only been put to inconvenience for no more than a fraction of 3.9 hours of time in relation to regaining access to the Premises.

25 Mr Thexton's submission about causing only minimal disruption to the manager is contrary to my finding made in the contempt reasons. Mr Thexton confirmed in the penalty hearing that he does not challenge that finding. I accept that there was no evidence that the legal welfare of any of Mr Thexton's clients had been actually compromised by his conduct although there was certainly the potential for that to occur.

The effect of the contempt on the administration of justice

26 The Board submitted that all orders are made in the interests of justice. Non-compliance necessarily constitutes an interference with the administration of justice even if the position can be remedied as between the parties. Here, however, the Board argued that the position was more serious, as Mr Thexton's non-compliance with the Order carried the added impact of interference with the conduct of an external intervention imposed by the regulator.

27 Mr Thexton relied on his submission concerning the 'consequences' of the contempt and submitted that there was no effect on the administration of justice.

28 On this issue, I accept the Board's submissions.

The contemnor's personal circumstances, antecedents and financial means

29 The Board noted that Mr Thexton had not tendered any evidence on these subjects, but it acknowledged that it did not allege any antecedent behaviour or convictions.

30 From the bar table Mr Thexton put the following submissions:

(a) prior convictions or findings of disciplinary action: he has no prior convictions and has had no prior findings of disciplinary action since being admitted to legal practice in 2004;

(b) practising certificate: he remains without a legal practising certificate, and his hearing at the Victorian Civil and Administrative Tribunal in relation to contesting the suspension and refusal to renew his practising certificate is still 'a long way off';

(c) employment: since the second week of December 2020, he has been undertaking work in a business known as 'Airtasker', an internet business for delivery of trades services and transporting goods. He said he had done roughly 400 jobs in that time period, although added that these had not produced significant income;

(d) financial position: his Law Practice has been shut down and his consequential financial losses have been severe. Mr Thexton did not produce any documents to support his submissions regarding his financial position, but he claimed to be in a parlous financial position. Specifically, he informed me that his losses included:

(i) a debt of between $30,000 and $40,000 on the lease of the Law Practice's premises in Perth;

(ii) a further debt for (unspecified amounts of) monies for the lease of the Premises in Melbourne; and

(iii) an overall shortfall of approximately $120,000 on the sale of two investment properties in Mernda.

Mr Thexton also informed me that the Law Practice's liquidation proceedings are to be held on 5 July 2021, and that he had managed to 'get some funds' with respect to that proceeding. He did not say how he had obtained those funds. Those funds, he said, enabled him to pay some 'small debts' to avoid the Law Practice going into liquidation; and

(e) personal circumstances: Mr Thexton has a partner with whom he has a child aged five and he also has a stepdaughter aged 13 who lives with them. Mr Thexton informed me that his partner had not had paid work for some time while she had looked after the children, and had only recently obtained employment.

31 For the purpose of determining the appropriate penalty I accept that what Mr Thexton has informed me is an accurate picture of his circumstances.

32 The Board argued that Mr Thexton's culpability is at the high end, given the deliberateness of his conduct and his efforts to circumvent the operation of the Order.

33 Mr Thexton argued that, if any culpability could be determined, it would be at the lowest end of the range, because it had been the landlord that had arranged for the change of the locks on the office and, after having been paid some of the outstanding rent, it was the landlord who continued to deny the manger access to the Premises (without any reference to Mr Thexton).

34 This argument ignores contrary findings in the contempt reasons. It does not do Mr Thexton any credit. On this issue, I accept the Board's submissions.

The need to deter the contemnor and others from repeating the contempt

35 The Board argued that, given the functions the manager had been appointed to perform, there is a clear need to deter Mr Thexton and others from repeating this contempt. As contemplated by Nettle J in Primelife, the Board argued that a punitive aim is warranted so as to vindicate the authority of the court and bring home to Mr Thexton and to others the importance of complying with court orders and of not obstructing the regulator or its appointed external interveners in the performance of their statutory duties.

36 Mr Thexton made no written submissions on the question of deterrence. In oral submissions, he referred to R v Garde-Wilson[27] for the asserted proposition that a finding of guilt alone was significant deterrence. That is not quite correct: what Harper J said was that, for the defendant in that case, a young solicitor, a recording of a conviction would itself constitute a penalty.[28] I also accept that proposition with respect to Mr Thexton. But Harper J continued by saying that a failure to record a conviction in that case would have sent a wrong message in a situation (refusing to give evidence in a criminal trial) in which general deterrence was vital. Much the same could be said in respect of any legal practitioner who wilfully disobeys any order of the Court.

37 Mr Thexton tendered an article headed 'Glenn Thexton, former solicitor restrained from practicing [sic] law, breaches court orders' that had been published on 23 June 2021 on a website named aisles.com.au.[29] He submitted that the article contained inaccuracies about the hearing on 15 June 2021 which reflected negatively on him and was therefore, itself, extra-curial punishment.

38 Mr Thexton also tendered references to establish his good character.[30] He also tendered roughly 300 reviews in relation to various jobs that he had undertaken on 'Airtasker', which, he submitted, showed that he was professional, reliable, courteous, fast and efficient.[31] The character references are impressive, so far as they go. All were dated in about August 2020 around the time that Mr Thexton's practising certificate was suspended and the manager was appointed. They attest to his professionalism as a legal practitioner and his decency as a person. Clearly, none of the referees have commented on his character in the light of the finding that he is guilty of contempt of court. The disconnect between the person of whom the references speak and the person who defiantly disobeyed the Order remains unexplained.

Whether the contemnor has exhibited general contrition and made a full and ample apology

39 The Board submitted that Mr Thexton has exhibited no contrition and has made no apology. In fact, the Board submitted, he had positively denied that he had directed for the locks to be changed, and he had taken no steps to rectify the damage that he had done. Rather, he left the manager to sort out access to the Premises himself.

40 Mr Thexton submitted that he had made every effort to resolve the dispute at the time by trying to communicate with the manager. He submitted that no employee of the Board ever spoke to him about the issues nor was there any discussion with the manager to 'work through the issue'. This submission is disingenuous. The manager made numerous efforts by email to have Mr Thexton provide access to the Premises or at least to authorise the locksmith to release the key to the manager. This Mr Thexton would not do; instead he obfuscated.

41 Initially, Mr Thexton wished to rely upon a number of emails between himself and the Board in April 2021,[32] to show that he had made offers to resolve the Summons, as a means of showing 'contrition'. I disallowed the admission of the emails, which contained without prejudice negotiations, for the purpose of proving Mr Thexton's so-called contrition, but I allowed them to be tendered for the purpose of determining costs. Nevertheless, Mr Thexton submitted that, because the Board had refused his offer to plead guilty to one charge if the other was dropped, he was entitled to put the Board to its proof on both charges. The Board, in reply, pointed out that, rather than merely putting the Board to the proof, Mr Thexton had positively denied the charge and had contested the facts at the hearing on 15 June 2021. Clearly, Mr Thexton could have pleaded guilty to Charge 1 and fought the other. He did not do that. I see no reason to accept his apparent offer to settle the application as proof of contrition.

42 Lastly, when asked directly what he wanted to submit on the question contrition, Mr Thexton said 'I am contrite ... in the sense that I think you can look at the way that I've conducted these proceedings before you in terms of being respectful to this Court, and, of course, to yourself and also my opponents.' I accept that he was respectful both to the Court and to the Board's representative. Self-evidently, respectfulness in Court is not the same thing as an apology or an expression of contrition for the charged conduct in contempt of the Order.

43 I find that Mr Thexton has not shown any insight into the seriousness of his conduct. He made no apology. He does not seem to have accepted that he did anything wrong. He continues to blame the Board for taking the step of suspending his certificate and the manager for not paying rent on the Premises for which Mr Thexton was personally liable.

44 I repeat that Mr Thexton made no apology for his conduct or even appeared to unambiguously accept any wrongdoing. Worse than that, in defence of the charge he submitted that the conduct with which he had been charged for contempt, namely the changing the locks to lock out the manager, was trivial. In effect, he maintained that stance in one form or another on his plea, seeking to diminish the dimension of any inconvenience caused to the manager by reference to the entry on the fee invoice. Mr Thexton also appeared to justify or mitigate the seriousness of his conduct by characterising the changing of the locks as a legitimate or excusable strategy in his dispute with the Board over his practising certificate. In doing so, he sadly miscalculated.

45 Mr Thexton displayed no insight at all into the gravity of his conduct, particularly the fact that it was done in flagrant contravention of a court order made expressly to restrain him from hindering or obstructing the manager.

46 I took into account that the Board, and the manager whom it had appointed, were carrying out a public role for the protection of the public, namely clients of legal practitioners.

47 I also took into account that Mr Thexton appears to have no financial capacity to pay a fine and, for reasons I will briefly explain, I ordered that he pay 75% of the Board's costs on an indemnity basis. The Board estimated its total costs to be in the vicinity of $50,000. It would have been futile to punish Mr Thexton with a fine. Further, I have had regard to the fact that Mr Thexton is substantially, if not wholly, responsible for the support of his family.

48 It was relevant to penalty in Mr Thexton's case to give some weight to the purpose of general deterrence. Albeit to a lesser degree, I thought that the objective of specific deterrence for Mr Thexton was also a relevant objective, especially having regard to his apparent failure to come to grips with his wrongdoing. The extent to which specific deterrence is influential is somewhat attenuated by the evidence of Mr Thexton's previous good character. Additionally, in deciding upon the appropriate penalty, I considered I should signal the Court's denunciation of conduct which has a propensity to undermine the Court's authority.

49 The Board produced a useful table of relevant decisions on contempt penalties, reproduced here:

3) [2007] VSC 52

Scott & Ors v Evia Pty Ltd & Ors (No 2) [2007] VSC 110

Orders provided that the defendants must permit receivers to remain in possession of property; defendants caused the locks to be changed and excluded the receivers and removed property.

Fines of $100,000 and 30 days' imprisonment for the criminal contempt.

Koulouris v Haidaris (No 3) [2020] VSC 240

Freezing order: failure to file affidavit regarding assets and financial position.

VICT v CFMMEU (2018) VSC 794

Injunction against CFMMEU restraining it from preventing access to a site; three officials picketed for 35 minutes.

Hera Project Pty Ltd v Bisognin (No 2) [2019] VSC 625

Two freezing orders: failure to file information required by the orders.

50 Mr Thexton referred to Victorian Legal Services Board v Telfer[33] ('Telfer'). He submitted that Telfer was instructive in that it involved a solicitor who had breached an order restraining him from engaging in legal practice. He submitted that the solicitor had only been given a term of imprisonment after he breached the order a second time. As each case turns on its own facts, I did not regard Telfer is setting any type of benchmark for what I should do in this case. In any event, it may be argued that Mr Thexton's conduct is not so different. After all, he was first made the subject of the Order because of obstructive behaviour toward the manager after the manager's appointment. After that, he engaged in the further obstructive behaviour which is the subject of my finding of contempt.

51 Mr Thexton also submitted that pursuant to s 8 of the Sentencing Act 1991 (Vic) it was open to the Court not to record a conviction. I accepted that a conviction itself is a penalty, especially for a solicitor with no criminal history, but I was satisfied that in this case I should record a conviction.

52 Relevantly, r 66.10 of the Rules provides that a judgment shall not be enforced by committal unless a copy of the judgment is served personally on the person to be bound and endorsed with a notice warning that the person is liable to imprisonment if the person disobeys a judgment that the person abstain from doing an act. Mr Thexton consented to (and was served with) the 14 October 2020 order with such a warning endorsed upon it.

53 I came to the conclusion that I must impose a custodial sentence to reflect the seriousness of Mr Thexton's contempt and to give effect to the sentencing objectives that I identified. In my view, a custodial sentence of 30 days was an appropriate penalty. Nevertheless, because Mr Thexton has no criminal history, the recording of a conviction and imposition of a custodial sentence alone will be a salutary penalty, Mr Thexton is in gainful employment with dependants and has significant debts he is working to meet, I was satisfied that it was appropriate to suspend the whole period of the sentence of imprisonment.

54 As to costs, Mr Thexton submitted that a large amount of documents in the court book were irrelevant and not referred to in the hearing on 15 June 2021, which should affect a costs order, if one was to be made. The Board submitted that I should order costs against Mr Thexton on an indemnity basis. If any allowance was to be made for the fact that the Board failed on Charge 2, the Court could make that allowance by modestly discounting the total costs which Mr Thexton should pay.

55 Costs are always in the discretion of the Court. However, it is common in successful contempt cases to award indemnity costs against the defendant.[34] Mr Thexton submitted that I should not award costs for a variety of reasons which I rejected, but I accepted that some modest allowance in his favour should be made for the fact that the Board failed on Charge 2. Otherwise I saw no reason not to award indemnity costs in this case. Accordingly I ordered Mr Thexton to pay 75% of the Board's costs of the Summons and of its application in December 2020 to reinstate this proceeding, on an indemnity basis.

[1] The Board is the plaintiff in the proceeding and the applicant in the application which is the subject of these reasons. Mr Thexton is the defendant in the proceeding and the respondent in the application which is the subject of these reasons.

[2] Victorian Legal Services Board v Thexton (contempt) [2021] VSC 357 ('contempt reasons'). Defined terms in the contempt reasons will continue to be used and have the same meaning in these penalty reasons.[.]

[6] Hera Project Pty Ltd v Bisognin (No 2) ('Hera 2') [2019] VSC 625, [53].

[7] Hera Project Pty Ltd v Bisognin [2019] VSC 483, [80].

[8] [2018] VSCA 280 ('Sidebottom v The Queen').

[11] [2014] VSCA 261; (2014) 47 VR 527.

[16] [2003] VSC 106.

[21] [2019] VSC 625.

[23] Grocon (above n 11) 565 [148], 565 [149] and 565 [151].

[27] [2005] VSC 452.

[33] [2017] VSC 248.

[34] See, for example, Hera 2 (above n 6) at [61] (Champion J); Deputy Commissioner of Taxation v Gashi (No 3) [2011] VSC 448, [20] (Dixon J); National Australia Bank Ltd v Juric [2001] VSC 375, [67]-[70] (Gillard J); Advan Investments Pty Ltd v Dean Gleeson Motor Sales Pty Ltd [2003] VSC 201, [120] (Gillard J); Scott v Evia Pty Ltd (No 2) [2007] VSC 110, [34]-[38] (Dodds-Streeton J); and Moira Shire Council v Sidebottom Group Pty Ltd (No 3) [2018] VSC 556, [140] (Zammit J).