Consideration
8 The circumstances give rise to two independent discretionary considerations as to the exercise of the Court's power whether to grant Adam's interlocutory applications. First, there is a principle that a party in contempt of Court ordinarily will not be heard in the proceedings in relation to which the contempt exists. Secondly, the exercise of a discretionary power of the kind conferred by r 1.39 is to relieve against injustice: FAI General Insurance Company Ltd v Southern Cross Exploration NL (1988) 165 CLR 268 at 283-284 per Wilson J, see esp at 283, with whom Brennan, Deane and Dawson JJ agreed, see too at 291 per Gaudron J, and Sydney Equine Coaches Pty Ltd v Gorst [2017] FCAFC 34 at [17]-[19] per Rares, Flick and Bromwich JJ.
9 What is signal about each of the present applications is the absence of any evidence, first, about why it is being made and, secondly, of any expression of contrition or acknowledgment of the Court's authority by Adam himself.
10 The Full Court said in Kazal [2017] FCAFC 111 at [148]-[149]:
148 it was submitted on behalf of the respondents that there was no evidence to support the assertion that the appellant's conduct was in some way benign. It was pointed out that the appellant has never made an apology or expressed any remorse for his conduct. In those circumstances, it was submitted on behalf of the respondents that the observations of the primary judge:
(1) at [27] of the sentence judgment that the regret expressed was as to being found guilty, rather than an apology or any sort of contrition; and
(2) at [50] of the sentence judgment that the appellant had shown no respect for the orders of the Court and no remorse for his conduct and further no respect for the right of the respondents to litigate their dispute with him and his brother on the merits, were fairly open to his Honour.
149 The respondents' submissions should be accepted. The appellant's anger at perceived injustice and his consequent lack of self-control in the face of both the substantive proceedings and direct orders to desist not only deny the benign characterisation he asserted, but heighten the need for specific and general deterrence. Actions such as this may be driven by anger, self-justification and even vigilante sentiments. This cannot be tolerated if the rule of law, and the role of the courts, is to have a meaningful part to play in maintaining civil society. There was no error on the part of the primary judge on this topic. (emphasis added)
11 Even now, nearly six months after he was convicted, silence about his conduct remains Adam's position.
12 The proceedings commenced in 2014 and Adam was served on 16 January 2015. Rule 16.32 required Adam to file and serve a defence within 28 days of service of the statement of claim, but Adam never served a defence in the proceedings and first sought to file one when he made his interlocutory application on 16 June 2017, shortly before the Full Court handed down its reserved decision. The terms of that defence, as finally settled by counsel, asserted that the imputations on which the applicants rely and the contextual imputations which Adam pleaded were true, but that "[f]urther particulars may be provided after discovery and interrogatories" without there being any content to the basis upon which the plea of truth was sought to be advanced. He also alleged that his publications occurred on occasions of qualified privilege and that they did not involve any misleading or deceptive conduct on his part.
13 The consequence of Adam not filing a defence in accordance with the Rules or, as occurred, at all, is that provided in r 16.07(2), namely that the allegations, made in the statement of claim that were not specifically denied, are taken to be admitted. Moreover, under r 5.22(a) and (b), Adam was in default because he had failed, first, to do an act required to be done by the Rules, namely to file a defence and, secondly, to comply with an order of the Court being the subject of two of his convictions for contempt. Under r 5.23(2), where a respondent is in default, an applicant can apply for certain relief, including an order giving judgment against that respondent for damages to be assessed or any other order. That has not happened in these proceedings to date.
14 What Adam is seeking to do is to participate as an active party in the proceedings in circumstances where, first, he remains in contempt and, secondly, he is seeking to withdraw admissions and obtain a discretionary remedy for an extension of time of nearly two and a half years in which to file his defence.
15 In Celestino v Celestino [1990] FCA 449, Spender, Miles and von Doussa JJ said at 8-9:
… where leave to withdraw an admission is sought, a court will require an explanation for the making of the admission. The explanation must be a sensible one based on evidence of a solid and substantial character: Langdale v. Danby [[1982] 1 WLR 1123] at 1134; Hollis v. Burton [1892] 3 Ch. 226; and Cumper v. Pothecary [1941] 2 K.B. 58 at 70.
…
Even where sufficient explanation for the erroneous or mistaken making of an admission is provided, the admission may only be withdrawn where no injustice will be occasioned thereby to the other party. (emphasis added)
16 Of course, since then, the concept of costs being ordinarily a salve sufficient to assuage any injustice or prejudice no longer applies, as a result of the decision in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, esp at 214-215 [100]-[103] per Gummow, Hayne, Crennan, Kiefel and Bell JJ. They went on to point out that provisions, such as are now found in Pt VB, especially s 37M, of the Federal Court of Australia Act 1976 (Cth), require that the extent of delay and costs associated with it, together with prejudice which might reasonably be assumed to follow and which was shown, are now to be weighed against the grant of permission to a party to alter its case. They added that the nature and importance to the party applying for the amendment also could not be overlooked. They said (239 CLR at 214-215 [102]-[103]):
Much may depend upon the point the litigation has reached relative to a trial when the application to amend is made. There may be cases where it may properly be concluded that a party has had sufficient opportunity to plead their case and that it is too late for a further amendment, having regard to the other party and other litigants awaiting trial dates. [Section 37M] makes it plain that the extent and the effect of delay and costs are to be regarded as important considerations in the exercise of the court's discretion. Invariably the exercise of that discretion will require an explanation to be given where there is delay in applying for amendment.
…
Generally speaking, where a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for. The importance attached by [s 37M] to the factor of delay will require that, in most cases where it is present, a party should explain it. Not only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court's attention, so that they may be weighed against the effects of any delay and the objectives of the Rules. (emphasis added)
17 Likewise, in Tamaya Resources Ltd v Deloitte Touche Tohmatsu (2016) 332 ALR 199 at 226 [153]-[156], Gilmour, Perram and Beach JJ discussed the need for an explanation and the manner in which it is given in such circumstances (and see also Jackamarra v Krakouer (1998) 195 CLR 516 at 520 [4] per Brennan CJ and McHugh JJ). They noted that:
It must be borne in mind that the explanation required is that of the moving party, not merely their solicitor or counsel. The client may very well know of matters relevant to the explanation for delay which are not known by the lawyers. (emphasis added)
18 Counsel for Adam conceded that there is an absence of any explanation by or on behalf of his client. He acknowledged that ordinarily a party in contempt in proceedings, in which that party seeks to be heard, will not be heard before the contempt is purged or cured, except in special cases.
19 There exists a variety of decisions of superior courts in England and Australia as to the precise way in which that principle operates.
20 Lord Bridge of Harwich (with whom Lords Templeman, Griffiths, Oliver of Aylmerton and Lowry agreed) said in X Ltd v Morgan-Grampian (Publishers) Ltd [1991] 1 AC 1 at 46G-H that the flexible approach of Denning LJ in Hadkinson v Hadkinson [1952] P 285 at 298 should be applied, namely that:
the fact that a party to a cause has disobeyed an order of the court is not of itself a bar to his being heard, but if his disobedience is such that, so long as it continues, it impedes the course of justice in the cause, by making it more difficult for the court to ascertain the truth or to enforce the orders which it may make, then the court may in its discretion refuse to hear him until the impediment is removed or good reason is shown why it should not be removed. (emphasis added)
21 A similar approach was taken by Bray CJ, with whom Mitchell and Jacobs JJ agreed, in Short v Short (1973) 7 SASR 1 at 11. In contrast, in the Court of Appeal of the Supreme Court of New South Wales in Permewan Wright Consolidated Pty Ltd v Attorney-General of the State of New South Wales; on the relation of Franklins' Stores Pty Ltd (1978) 35 NSWLR 365 at 369C-E, Hutley JA followed the approach of Romer LJ, with whom Somervell LJ agreed, in Hadkinson [1952] P at 288, namely that, "no application to the court by [a person in contempt of an order] will be entertained until he has purged himself of his contempt".
22 There is no decision of the Full Court of this Court binding me in the approach to be taken, as Dowsett J recognised in Foster v Australian Competition and Consumer Commission (2014) 219 FCR 563 at 578 [39]-[40].
23 Adam has given no explanation for, first, wanting to withdraw his admissions and, secondly, his conduct in relation to his failure to file a defence and why he now wishes to do so. That position, of itself, demonstrates that he is unwilling to explain his behaviour to the Court in seeking its indulgence, nearly two and a half years after he initially elected not to file a defence. The result of that election was to treat these proceedings as ones he was content to have decided against him with all the consequences that that may involve.
24 The significance of Adam's silence on why he is seeking a favourable exercise of the Court's discretion is compounded when coupled with the contempts of which he has been found guilty and for which he continues to serve his sentence of imprisonment. At no point in the process has Adam accepted or acknowledged the authority of the Court. He consented to two orders, which he contravened, that became the subject of two of his convictions. His other two convictions that the Full Court upheld, involved his serious and deliberate interferences in the administration of justice.
25 In those circumstances, there is an absence of any explanation for his conduct and a complete failure of Adam to recognise that what he has done was, not only wrong, but, very seriously wrong, as is his failure to seek to purge his contempt. His attitude demonstrates that, whatever the appropriate test for hearing a party who is in contempt in the proceedings, he should not be heard because of his contempt. I infer that he has no respect for the orders or authority of the Court, even after the experience he has been through of his convictions and substantially unsuccessful appeal, and having served nearly six months in prison as a result.
26 For Adam to come to the Court today, by his lawyers, without even seeking to give any form of explanation of his conduct or acceptance and recognition of the Court's authority or to express contrition for his behaviour is a demonstration that to allow him to participate him in the proceedings would be to invite further defiance of the Court's authority. It is not appropriate to allow Adam to use the Court's process as and when he chooses while being free, in his own mind, to defy its authority and process likewise as and when he chooses. This is not a case in which it is in the interests of justice to permit a person, such as he, to be heard. He has been found guilty of four very serious contempts. He has given no explanation for his delay or his reason for wishing to change his course by filing a defence after deliberately allowing a long period of time to pass in these proceedings.
27 He is not now entitled to have the benefit of a favourable exercise of the Court's discretion to allow him now to participate in the proceedings or to defend himself. Far less is it appropriate to permit him, as a contemnor, to engage further in this litigation and subject his adversaries, the applicants, to further expense in circumstances where it is apparent that he has carefully structured his affairs so that, although very well resourced to afford legal representation and a comfortable lifestyle for himself and his family, he has no apparent assets that he has been willing to disclose to his trustee in bankruptcy in his statement of affairs or to reveal where or how he will find the money to pay the already outstanding significant costs orders. He has demonstrated no respect for the orders of the Court or its authority.