The Prothonotary of Supreme Court of New South Wales v Battye

The sentencing regime

1. There was no issue as to the applicable legislative schemes and their operation. Under Part 55 Rule 13 of the Supreme Court Rules 1970 (NSW) and the Crimes (Sentencing Procedure) Act 1999 (NSW) available penalties for criminal contempt of the kind Mr Battye has admitted include imprisonment.
2. Under Rule 40.7 of the Uniform Civil Procedure Rules 2005 (NSW) a sentence of imprisonment may not, however, be imposed unless the contemnor was personally served with a sealed copy of the order in question, bearing a notice that disobedience of the order could result in imprisonment. The District Court order served on Mr Battye did not contain such a notice, but Rule 40.7(5) permits the Court to dispense with that requirement.
3. On the authorities this is a discretion not to be lightly exercised (see the discussion in Commissioner for Fair Trading v Rixon (No 3) [2014] NSWSC 1279 at [11] - [24]). The Prothonotary urged the Court to exercise the discretion in this case, given the seriousness of Mr Battye's contempt, he being an officer of the Court who, it could be inferred, was well aware that the potential consequences of such a contempt could include a term of imprisonment.
4. Mr Battye, who appeared unrepresented, did not submit otherwise, either in written or oral submissions. His case was, however, that his circumstances were such that the discretion granted the Court by s 10 of the Crimes (Sentencing Procedure) Act could be exercised in his favour. That section permits the charge to be dismissed on condition that he enter into a good behaviour bond for a term not exceeding 2 years.
5. Given the nature and seriousness of Mr Battye's contempt, which I will explain, while I am satisfied that the discretion granted the Court by Rule 40.7 should be exercised in Mr Battye's case, the discretion to dismiss the charge granted by s 10 cannot be exercised in his favour.
6. In sentencing Mr Battye the requirements of the Crimes (Sentencing Procedure) Act must be observed, including the purposes of sentencing specified in s 3, namely: "(a) to ensure that the offender is adequately punished for the offence, (b) to prevent crime by deterring the offender and other persons from committing similar offences, (c) to protect the community from the offender, (d) to promote the rehabilitation of the offender, (e) to make the offender accountable for his or her actions, (f) to denounce the conduct of the offender, (g) to recognise the harm done to the victim of the crime and the community."
7. As well as Mr Battye's personal circumstances and considerations of personal and general deterrence, the relevant aggravating and mitigating matters specified in s 21A must be taken into account, as must his guilty plea, entered as it was at the earliest opportunity (see s 24). As discussed in various later authorities, the 10 factors identified by Dunford J in Wood v Staunton (No 5) (1996) 86A Crim R 183 at 185 must also be considered. They are: "(1) the seriousness of the contempt proved; (2) whether the contemnor was aware of the consequences to himself of what he proposed to do; (3) the actual or potential consequences of the contempt on the proceedings in which the contempt was committed; (4) whether the contempt was committed in the context of a proceeding alleging crime or conduct seriously prejudicial to the public interest: see, for example, Von Doussa v Owens (No 3) (1982) 31 SASR 116; (5) the reason or motive for the contempt; (6) whether the contemnor has received, or sought to receive, a benefit or gain from the contempt; (7) whether there has been any expression of genuine contrition by the contemnor; (8) the character and antecedents of the contemnor; (9) what punishment is required to deter the contemnor and others of like mind from similar disobedience to the orders of the Court; and (10) what punishment is required to express the Court's denunciation of the contempt."

The nature and seriousness of Mr Battye's contempt

1. There can be no question as to the seriousness of Mr Battye's contempt. That follows not only from the amount of the debt involved and the deliberate way in which he pursued his breach of the District Court's order, by transferring the shares to Mr Browning for his personal benefit, instead of to Mr Lin, but also from the fact that he was a solicitor of long standing, then still in practice. In the result, it cannot be doubted that he was well aware of the seriousness of the contempt involved in his conduct.
2. It is relevant that Mr Battye's deliberate conduct was pursued not while acting in his capacity as a legal representative of a party to proceedings in the District Court, but as a party bound himself by the Court's orders. The purpose of his contempt was to deprive Mr Lin of the benefit of the order made in his favour, in respect of an acknowledged debt and thereby to benefit himself in the ways he has explained. As recently observed by Forrest J in The Queen v Witt [2016] VSC 142 at [112], nevertheless, officers of the Court such as Mr Battye must be held to a higher standard of behaviour than lay persons.
3. The result of Mr Battye's conduct was not only a serious interference with the proper administration of justice, but no doubt considerable time, trouble and expense for Mr Lin, given the steps he was forced to pursue, in order to remedy the consequences of Mr Battye's contempt. That contempt would plainly have been even more serious had the shares not finally been transferred to Mr Lin as they were.
4. Mr Battye gave no evidence on sentence, but the pre-sentence report, in which he outlined his personal and professional circumstances was in evidence. It was not the Prothonotary's case that the veracity of any of the information he provided to the author of the report should be doubted.
5. At the time of his contempt Mr Battye, now aged 69 years, had long been in legal practice and was sitting on several boards of companies in the mining sector. He was then under considerable financial pressure, as the result of a hostile takeover of Commissioners Gold. He was also facing the threat of bankruptcy.
6. The report indicated that despite service of the District Court's order in favour of Mr Lin, Mr Battye decided to transfer the shares to Mr Browning, so as to avoid the hostile takeover by transferring the shares to a shareholder who had undertaken to support him at a shareholders meeting. Thereby he erroneously thought that he would buy himself further time.
7. In evidence were letters sent in 2013 and 2014 by Mr Battye's then solicitors to Mr Lin's solicitor, which amongst other things acknowledged his indebtedness to Mr Lin and his offer to satisfy the debt, once the company commenced gold mining operations. He advanced various proposals for settling their dispute over the transfer of the shares, which obviously were not accepted, given what transpired before Rothman J. Deeds by which settlements were reached with other investors in the company were also in evidence, as was the company's 2013 annual report, which revealed that Mr Battye was then the executive chairman of Commissioners Gold and holder of some 8,005,000 shares.
8. In his written submissions Mr Battye described his contempt to have been the result of a "lapse of judgment", which occurred at a time when he was both a director and shareholder, resisting the hostile takeover. His explanation was that at the time he and the company were both financially stretched, while trying to bring its gold plant in southern Peru from trial to full production. In the result, he said, his judgment had been clouded by an undertaking given by Mr Browning, that he would vote for "the status quo" and the incumbent Board.
9. At that time, Mr Battye said, the company's shares were "still escrowed' by the ASX, so that no party could sell them on market, with the result that the value of his shares to Mr Lin was voting power.
10. Mr Battye accepted that the issue of the control and direction of the company should not have been a fact in his decision to favour the first in time option claimant, Mr Browning. He also accepted that it was understandable that the option holders had run out of patience. He said that "as a consequence I allowed my sense of obligation to my seed Shareholders, my management team and our collective corporate survival to cloud my judgement".
11. Mr Battye also said that: "It was the declared intention of both the Board and I that once in commercial production all claimants would be paid out with interest. I appreciate that our assurances gave the Option holders little comfort, due to commissioning delays at the plant. But as it transpired, within six months of my Supreme Court attendance on 28th November 2013 all Option interests had been paid out by me personally. I provide to the Court several Deeds of Settlement, for Option claimants Haratsis and Braddock (Annexure C). I hesitate to say, but will, that I was the defendant to the Option holders litigation/Default Judgments but I did not act as solicitor on the record. Put another way, my offending did not arise from my practising as a solicitor. I did not defend the claims brought against me because I did not dispute them. However, in attempting to meet my obligations to all Option claimants and yet still discharge my director's duties to Commissioners Gold Ltd and its shareholders to get the Company into commissioned gold production, I neglected my overarching duty to the Court. For that lapse, during a period of intense personal, financial and commercial stress, I sincerely apologise to the Court."
12. On the evidence there can, nevertheless, be no question that Mr Battye's contempt of the District Court was not merely technical or the result of a mistake or oversight on his part. The evidence establishes that it was a wilful and contumacious one. Despite what was advanced in his submissions, at the time the nature and seriousness of that contempt must have been apparent to Mr Battye.
13. Mr Battye was an officer of the Court, who was both then and now a practising solicitor. His deliberate contempt was committed on 28 November 2013, the day before Mr Lin's application to this Court for an order that the shares be transferred to him was listed for hearing. That Mr Battye then well understood the serious of the course he had taken, in breach of the District Court's order, to advantage both the company and himself personally, cannot be doubted.
14. That was underscored by Mr Battye's decision not to appear before Bellew J to defend Mr Lim's application on 29 November 2013, when his contempt would have had to have been revealed. Even when his contempt came to light, he persisted with the deliberate course he had embarked on, even to the time that Mr Lin's further application came on for hearing before Rothman J in March 2014.
15. In the result, it must be accepted that the interference which Mr Battye's contempt caused to the proper administration of justice was substantial and that the detriment thereby caused to Mr Lin was also significant, notwithstanding what followed the orders which Rothman J finally made.

Deterrence

1. These circumstances are such that there can be no question that general deterrence has a real role to play in Mr Battye's sentence. Parties to litigation, particularly those who are officers of the Court, must be deterred from pursuing their personal interests over the duty which they always owe to the Court to support, not to interfere with, the proper administration of justice.
2. I am also satisfied, however, that there is real contrition on Mr Battye's part for his admittedly serious lapse of judgment, which occurred at a time of considerable financial and other pressures. The evidence suggests that the contempt was an aberration on the part of a solicitor, then aged some 67 years, with an otherwise unblemished record after many years in legal practice. In the pre-sentence report he was also assessed as having limited prospects of committing any further contempt.
3. Accordingly, I have concluded that in his case, despite the seriousness of his contempt there is a limited role for specific deterrence in Mr Battye's sentence.

Mitigating factors

1. There was no issue that relevant mitigating factors include Mr Battye's entry, at the earliest opportunity, of a plea, which the Prothonotary accepted should result in a discount on his sentence. That he has no prior criminal record or conviction for contempt is also relevant. The evidence also suggests that Mr Battye was otherwise a person of good character.
2. It is apparent that Mr Battye's contempt, deliberate though it was and pursued as it was for personal benefit, involved an uncharacteristic serious lapse of judgment on his part, the result of the difficult financial circumstances he was then dealing with.
3. Mr Battye's repeated apologies for his contempt must be accepted as genuine. That the consequences of his contempt have been addressed, is also relevant as is his approach to the contempt proceedings.
4. These must all be accepted as mitigating the penalty which would otherwise be imposed upon Mr Battye.

Aggravating factors

1. There are no other specified aggravating factors which arise for consideration.

Personal circumstances

1. The pre-sentence report reveals that Mr Battye is single and self employed. As I noted earlier, he is now a 69 year old man, not yet retired. He continues to sit on a number of boards and to practice his profession as a solicitor. He commenced practice in 1989 and took a year off legal practice in 1998 to pursue mining, in which he has a longstanding interest. No other evidence was led as to his financial or personal circumstances.
2. The report referred to the financial stress Mr Battye was experiencing at the time of his contempt, when facing the hostile takeover, pressures which had commenced in approximately 2010 and had built over time. He was facing bankruptcy, several default judgments had been entered against them and a caveat placed over one of his properties, while "battling" to commence gold production in Peru.

Other considerations

1. Also to be taken into consideration is that the personal and financial consequences of Mr Battye's conviction of this contempt are likely to be very considerable.
2. In all likelihood, it must be accepted, his conviction will affect his ability to pursue his profession as a lawyer and his work as a company director. (See s 206B of the Corporations Act 2001 (Cth) and s 51 of the Legal Profession Uniform Law (NSW).

Sentence

1. The punishment which the Court may impose for a contempt of the kind here in question is unlimited. The punishment imposed on Mr Battye must be that considered to be necessary and appropriate in the exercise of the Court's inherent jurisdiction to safeguard the administration of justice and uphold the rule of law (see Registrar of Court of Appeal v Maniam (No 2) (1992) 26 NSWLR 309 at 314). The sentence imposed must also be such as to denounce his contemptuous conduct, in an appropriately emphatic way.

Section 10 of the Crimes (Sentencing Procedure) Act

1. That is why Mr Battye's application for orders under s 10 of the Crimes (Sentencing Procedure) Act, which permits the Court to make certain orders without proceeding to conviction, pressed on the basis that thereby he would not become a drain on the public purse and because a criminal record would preclude him from acting as a director, must be refused.
2. Mr Battye relied on his personal circumstances, namely, that at the time of his contempt he found himself in a corporate "crash or crash through" situation, to advance this application. His case was that the company was on the cusp of gold production and he had invested everything he had, a million dollars, for his shareholding and put in a decade of monumental effort, only to face losing it all in a hostile corporate takeover. He also submitted that he had not contemplated that he "would be disrespecting the Court when I favoured a PPSR register first in time Option holder".
3. For reasons I have already explained, I am satisfied that these submissions cannot be accepted. Mr Battye did not himself give evidence and so was not cross-examined about these matters. Nor were these submissions supported by any evidence as to his financial circumstances. Accordingly, they must be approached with caution.
4. Given all that I have earlier discussed as to what was revealed on the evidence, I am satisfied that it cannot be accepted that Mr Battye did not "contemplate" the disrespect involved in the contempt he committed when he transferred his shares, contrary to the District Court's order.
5. As I have explained, Mr Battye was an officer of the Court and practicing solicitor of many years standing. His training and experience, as well as his oath to this Court leave open no doubt as to his understanding of the contempt involved in his pursuit of his personal interests, contrary to the orders of the District Court and at the expense of Mr Lin.
6. In the result it cannot justly be concluded that the circumstances established on the evidence I have discussed, would permit the Court's exercise of the discretion granted by s 10. I am well satisfied that the seriousness of Mr Battye's contempt precludes that conclusion.
7. Attention was drawn by the Prothonotary to two cases where orders were made under s 10 (see Alafaci v Mangano (No 2) [2009] NSWSC 1366 and Gap Constructions Pty Ltd v Vigar Pty Ltd [2011] NSWSC 1061). Neither, however, involved contempt by an officer of the Court and both involved contempt of a much less serious kind than that which arises for consideration in this case.
8. Mr Battye drew attention to no authority where a situation analogous to his has arisen for consideration, let alone one where the s 10 discretion was exercised in favour of the contemnor.
9. In Forestview Nominees Pty Ltd v Perpetual Trustees WA Ltd [1998] FCA 946 an order of the kind Mr Battye seeks was made in favour of a solicitor. That solicitor had admittedly breached an order restricting access to subpoenaed documents in respect of which questions of confidentiality arose, when they were supplied to an expert, without prior notice of the name of the expert being given, as the order required, so that the expert could provide written confirmation of the receipt of confidentiality orders. That admitted contempt was found to have involved civil, not criminal contempt, in circumstances where the solicitor had himself drawn the breach to the Court's attention and had pursued steps to comply with so much of the order, as then could still be complied with.
10. The nature and seriousness of that contempt, having been neither deliberate, nor pursued in pursuit of personal gain, was clearly very different to that which arises for sentence in Mr Battye's case.
11. Each case must be decided on its own facts, of course. In Mr Battye's case I am well satisfied, however, that the s 10 discretion cannot be exercised in his favour, given the nature and seriousness of his contempt, which I have earlier explained.

The penalty

1. The difficult question to resolve is thus whether the nature and seriousness of Mr Battye's contempt can justly lead to the conclusion that a sentence other than a term of imprisonment should be imposed upon him. Had the shares not finally been transferred to Mr Lin, I consider that there would have been no option but to conclude that Mr Battye's contempt had to be punished by imposition of a term of imprisonment.
2. Given that transfer and all I have earlier discussed, while I do not consider that other available penalties such as home detention, good behaviour bonds, deferral of sentence, or a suspended sentence of imprisonment, are appropriate punishments for Mr Battye's contempt, I consider that an order for community service is an appropriate punishment in his case.
3. Section 8 of the Crimes (Sentencing Procedure) Act empowers the Court to impose a community service order directing an offender to perform community service work for a specified number of hours. Mr Battye has been assessed as suitable for such an order and the report indicates that there were no impediments to Mr Battye completing a community service order, in accordance with s 86(1) of the Crimes (Sentencing Procedure) Act. Such a favourable assessment report does not bind the Court, but it must obviously be taken into account.
4. There were also no criminogenic factors identified in the report, which would be addressed by Mr Battye's supervision by Community Corrections. Undoubtedly, that explains why Mr Battye was not assessed to be suitable for an intensive correction order, a sentencing option only available on such an assessment (see s 67(4) of the Crimes (Sentencing Procedure) Act).
5. Clause 23 of the Crimes (Sentencing Procedure) Regulation 2010 (NSW) specifies the community service orders which may be imposed by reference to the maximum terms of imprisonment which can be imposed for the offence in question. Where the maximum term of imprisonment exceeds 1 year, community service not exceeding 500 hours may be imposed.
6. That regulation has no direct application in this case, because there is no maximum sentence for contempt, but it does shed light on the underlying public policy "about the comparability of maximum sentences of imprisonment, and maximum sentences of community service order, for the one type of offence" (see NCR Australia v Credit Connection [2005] NSWSC 1118 at [94]).
7. The Prothonotary relied on an analogy there drawn by Campbell J (as his Honour then was), between the nature of the contempt there involved, and crimes involving offences against property, without violence (see NCR Australia at [95]). In that case, by withdrawals from accounts for personal benefit and contrary to a mareva order, the contemnor had reduced the amount available to the plaintiff to meet its judgment by $59,939.50. Orders totalling 320 hours of community service were there imposed. Here, by way of contrast, Mr Lin was not permanently deprived of the shares.
8. Having considered all I have discussed, I have concluded that the discretion to impose a community serviced order on Mr Battye should be exercised.
9. I have been swayed to that conclusion, notwithstanding the seriousness of Mr Battye's contempt, given the combination of the eventual transfer of the shares to Mr Lin; Mr Battye's early plea and the resulting discount which the Prothonotary accepted he should receive; his undoubtedly sincere contrition and regret for his actions; the unlikelihood that he will commit further contempt; his prior good record and character; his age and the other likely consequences of his conviction for his contempt; and the consequences of any failure to comply with the Court's order, namely revocation of the order under s 115 of the Crimes (Administration of Sentences) Act 1999 (NSW) and re-exercise of the sentencing discretion in respect of his contempt (see Bonsu v R [2009] NSWCCA 316 at [14]).
10. In the result I have concluded that Mr Battye must be sentenced to 375 hours community service.

Costs

1. There was no issue between the parties as to the Court's power to make a costs order against Mr Battye in the event that orders of the kind I propose to make were made (see Hinch v Attorney-General (Vic) (1987)164 CLR 15; [1987] HCA 56; at 89 - 90; Ronowska v Kus (No 2) (2012) 221 A Crim R 261; [2012] NSWSC 817 at [88] - [90] and ASIC v Sigalla (No 6) (2012) 291 ALR 391; [2012] NSWSC 83 at [31).
2. The circumstances I have discussed are such, I am satisfied, that there should be no departure from the usual order that costs follow the event, with the result that the order sought by the Prothonotary must be made.

Orders

1. For those reasons, I make the following orders and directions: 1. Mr Battye is convicted of his admitted contempt. 2. Mr Battye is sentenced to perform 375 hours of community service. 3. Mr Battye is to pay the Prothonotary's costs of the proceedings, as agreed or assessed. 4. Mr Battye is to report to Hornsby Community Corrections Office at 61 Hunter Street, Hornsby within 14 days of today's date, between the hours of 9.30 am and 4.30 pm. 5. Under s 93 of the Crimes (Sentencing Procedure) Act written notice of these orders is to be given to Mr Battye and to the Commissioner of Corrective Services, in the terms here specified.

Explanation under s 92 of the Crimes (Sentencing Procedure) Act

1. Section 92 of the Crimes (Sentencing Procedure) Act, also requires that all reasonable steps be taken to explain to Mr Battye, in language that he can readily understand, both his obligations under the community service order I have made, and the consequences that may follow if he fails to comply with them.
2. The explanation is as follows. Mr Battye you are obliged within 14 days to report to the Hornsby Community Corrections Office at 61 Hunter Street, Hornsby and thereafter to do all that is required of you, to perform the 375 hours of community service to which you have been sentenced. If you refuse to sign any necessary undertaking, or to carry out the hours of community service to which you have been sentenced, the Court's orders may be revoked and you may then be dealt with further by the Court for your contempt, including by imposition of a term of imprisonment.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 February 2017