Australia: Corporations beware! The High Court delivers - Contempt 101

The High Court's 17 June 2015 decision in Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd1 (CFMEU v Boral) serves as a timely warning to corporations not to breach the terms of injunctions or orders made against them in civil proceedings. Breaching such terms may result in contempt proceedings being initiated by another party to civil proceedings.

In such circumstances, a court may compel the corporate respondent to give discovery of documents, howsoever incriminating, without the corporation being able to rely upon protections afforded to natural persons who are similarly charged and who can rely on the privilege against self-incrimination and self-exposure to penalty as a basis to resist discovery and giving evidence.

FACTUAL BACKGROUND

In August 2013 Boral and other parties (the Boral Parties) commenced proceedings in the Supreme Court of Victoria for contempt of court by the Construction, Forestry, Mining and Energy Union (CFMEU).

The nature of the charge for contempt of court was criminal rather than civil on the basis of allegations that CFMEU wilfully and contumaciously disobeyed orders made by Hollingworth J on 5 April 2013 by establishing a blockade of a construction site in respect of which Boral supplied concrete.

The Boral Parties filed a summons seeking discovery from CFMEU of certain specific documents relevant to the question of whether CFMEU had authorised one of its employees to organise and implement the blockade.

Daly AsJ dismissed the Boral Parties' summons on the basis that the rules of civil procedure do not apply in contempt proceedings because contempt proceedings are criminal in nature.2

The Boral Parties appealed to Digby J, a judge of the Trial Division of the Supreme Court of Victoria, who upheld the Boral Parties' contentions that Daly AsJ had erred in two respects: a) in holding that the rules of civil procedure do not apply to contempt proceedings; and b) in holding that even if the rules of civil procedure do apply, discovery was inappropriate as a matter of discretion.

Digby J clarified that: a) contempt proceedings are civil proceedings3 even though they can be described as "criminal in nature" and that, accordingly, the rules of civil procedure applied to contempt proceedings; and b) an order for discovery was appropriate because it would not infringe any of CFMEU's rights or interests.

The CFMEU applied to the Court of Appeal of the Supreme Court of Victoria for leave to appeal. Ashley, Redlich and Weinberg JJA refused leave to appeal in a joint judgment.

The CFMEU subsequently sought special leave to appeal to the High Court, which leave was granted by Hayne and Keifel JJ on 13 February 2015.

CONTEMPT 101 - KEY TAKEAWAYS

The key takeaways from the High Court's decision in CFMEU v Boral for corporations charged with contempt of court are as follows:

  1. The court's power to punish a party for contempt is an exercise of judicial power by the court to protect the due administration of justice.4
  2. Contempt proceedings are criminal in nature5 but not all contempts are criminal.
  3. Where contempt proceedings appear to be remedial or coercive in nature as opposed to punitive, they are not proceedings for criminal contempt.
  4. In contrast, where the failure to obey an injunction is defiant and contumacious, it is a criminal offence6, and is regarded as a criminal contempt. The relief sought in a criminal contempt is punitive, rather than remedial or coercive and the proceeding is a penal proceeding.
  5. The standard of proof for contempt proceedings is beyond reasonable doubt.7 Notwithstanding the more onerous burden of proof, proceedings for contempt of court are civil proceedings and not in the nature of a criminal trial.8 This includes proceedings for criminal contempt.9
  6. The High Court elucidated the reasons for the distinction between civil proceedings for contempt and criminal proceedings. First, contempt proceedings are not heard before a jury. Secondly, contempt proceedings are not brought by the executive arm of the government but by private litigants in a civil context and the "spectre of oppression by the executive government" does not arise.10 This is based on the fact that a private litigant is not in the same position as a prosecuting authority, which can gather evidence by compulsory processes of search and seizure.

    As such, contempt proceedings are subject to the rules of civil procedure and are not, as submitted by CFMEU, 'quarantined' from the application of other rules, including rules as to discovery.11

  1. Whereas it is open for a natural person charged with contempt of court to rely on the privilege against self-incrimination and the privilege against self-exposure to penalty12 as a basis for not giving evidence and giving discovery, corporations are not afforded similar entitlements.
  2. The High Court's decision in Environment Protection Authority v Caltex Refining Co Pty Ltd (Caltex) made clear that a corporation is not entitled to rely on the privilege against self-incrimination13 even if it is charged with criminal offences.

    The High Court's decision in Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission14 made clear that the privilege against self-exposure to penalty is similarly not available to a corporation.

    The CFMEU did not dispute the ratio in Caltex and subsequent cases, but argued that the High Court's decision in Caltex was not inconsistent with the argument that the 'companion principle' (to the effect that the prosecution cannot compel the accused to assist it to discharge its onus) was a "corollary of the criminal standard of proof" and that contempt proceedings were accusatorial in nature.15

    In reliance upon the 'companion principle', the CFMEU argued that it was inconsistent with the accusatorial nature of the proceeding to require CFMEU to assist in proof of the alleged contempt by discovery of particular documents.16

    In their joint judgment, French CJ, Kiefel, Bell, Gageler and Keane JJ referred to Lee v The Queen17 and clarified that the 'companion principle' was not a 'companion' to the standard of proof applicable in such trials. Rather, the principle was an "adjunct to criminal proceedings",18 an aspect of the accusatorial nature of a criminal trial and a 'companion' to criminal trials.19

    Nettle J, in a separate judgment, referred to the differences between a contempt proceeding commenced by a private litigant and a criminal trial, which concerned a contest between the state and an individual. His Honour also referred to the comments of Mason CJ and Toohey J in Caltex.20

    Accordingly, CFMEU could not rely upon the 'companion principle' and the fact that Boral was required to prove the charges 'beyond reasonable doubt' as a basis for objecting to an order to give discovery.

  1. A party alleging contempt of court is not precluded from relying on affidavit evidence that supplements the original summons and affidavit evidence in support.21
  2. The High Court left open the possibility of a court exercising its discretion not to order that a corporate respondent charged with contempt give discovery.22
  3. In this instance, there was no question on appeal as to the correctness of the exercise of discretion by Digby J to order discovery.The nature and content of the documents sought in this particular case were such that they spoke for themselves and were brought into existence in the course of the conduct of the corporation's affairs by or through other (natural) persons acting in the service of the corporation.

    Accordingly, no concerns arose as to the "testimonial admissions that may be extracted by oppressive conduct [or] confessions of dubious reliability" being adduced.23

The CFMEU's submissions and reliance upon the 'fundamental principle' and the 'companion rule' as a basis upon which corporations may resist production of documents was an unsuccessful attempt at trying to create a loophole to the well established rule that corporate respondents are not entitled to rely upon the privilege against self-incrimination and the privilege against self-exposure to penalty, notwithstanding the fact that they are charged with criminal offences.

Whilst such corporate respondents may still be able to rely on a small discretionary window in which a court may refuse to order discovery at all, the High Court's judgment serves as a timely warning to corporations who have been restrained from engaging in certain conduct to adhere to the terms of such orders.

Failure to adhere to the terms may result in contempt proceedings and an order requiring the corporate respondent to hand over documents, howsoever incriminating, with the potential result of the corporation's documents assisting the party bringing the charges in meeting the higher burden of proof.

Footnotes

1 [2015] HCA 21.

2[2015] HCA 21 at [12]

3 Referring to Hinch v Attorney-General (Vict) (1987) 164 CLR 15

4 Re Colina; Ex parte Torney (1999) 200 CLR 386; cited by French CJ, Kiefel, Bell, Gageler and Keane JJ at [41]

5 Per Nettle J at [65] citing Witham v Holloway (1995) 183 CLR 525 at 534 per Brennan, Deane, Toohey and Gaudron JJ, quoting Hinch v Attorney- Generaly (Vict) (1987) 164 CLR 15 at 49 per Deane J.

6 Per Nettle J at [65] citing Doyle v The Commonwealth (1985) 156 CLR 510 at 516 per Gibbs CJ, Mason, Wilson, Brennan and Dawson JJ.

7 In Witham v Holloway (1987) 164 CLR 15 at 49; Brennan, Deane, Toohey and Gaudron JJ considered the distinction between civil and criminal contempt and held that "all charges of contempt must be proved beyond reasonable doubt"; cited by French CJ, Kiefel, Bell, Gageler and Keane JJ at [42].

8 Per French CJ, Kiefel, Bell, Gageler and Keane JJ at [45] referring to the plurality in Witham v Holloway (1995) 183 CLR 525.

9 Per Nettle J at [65] citing Hinch v Attorney- Generaly (Vict) (1987) 164 CLR 15 at 89 per Mason CJ, Wilson, Deane, Toohey and Gaudron JJ and Re Colina; Ex parte Torney (1999) 200 CLR 386

10 Per French CJ, Kiefel, Bell, Gageler and Keane JJ at [44]

11 French CJ, Kiefel, Bell, Gageler and Keane JJ at [28].

12 Per Nettle J at [67] citing R v Associated Northern Collieries (1910) 11 CLR 738 at 744-745 per Isaacs J; Clarkson v Director of Public Proseuctions [1990] VR 745 at 759 per Murphy J; and Rich v Australian Securities and Investments Commission (2004) 220 CLR 129 at 142 per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ.

13 (1993) 178 CLR 477 where the High Court held that "a corporation charged with an offence may not resist a lawful command to produce documents to a prosecuting authority...even though the corporation has been charged with criminal offences"; cited by French CJ, Kiefel, Bell, Gageler and Keane JJ in CFMEU v Boral at [3].

14 (2002) 213 CLR 543 cited by Nettle J at [51]. Nettle J also referred to the Full Court of the Federal Court of Australia's earlier decision in Trade Practices Commission v Abbco Iceworks Pty Ltd (1994) FCR 96.

15 Referred to by French CJ, Kiefel, Bell, Gageler and Keane JJ at [20] and [25].

16 The CFMEU's arguments in this regard are fleshed out in further detail by Nettle J at [52] and [58]

17 (2014) 88 ALJR 656 at 662

18 French CJ, Kiefel, Bell, Gageler and Keane JJ at [35]. The High Court in Lee v The Queen referred to the 'companion principle' as follows: there was a fundamental principle of the common law to the effect that "the prosecution is to prove the guilt of an accused person." The "companion rule to the fundamental principle is that an accused person cannot be required to testify [and][t]he prosecution cannot compel a person charged with a crime to assist in the discharge of its onus of proof;" (2014) 88 ALJR 656 at 662

19 [2015] HCA 21 at [37]

20 To the effect that the privilege against self-incrimination is not available to a corporation in a prosecution for a criminal offence because it would have a "disproportionate and adverse impact in restricting the documentary evidence which may be produced to the court in a prosecution of a corporation for a criminal offence"; (1993) 178 CLR 477 at 504; cited by Nettle J at [70]

21 French CJ, Kiefel, Bell, Gageler and Keane JJ at [31]

22 See for example the comments of French CJ, Kiefel, Bell, Gageler and Keane JJ at [44]

23 French CJ, Kiefel, Bell, Gageler and Keane JJ at [38]

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Most awarded firm and Australian deal of the year
Australasian Legal Business Awards
Employer of Choice for Women
Equal Opportunity for Women
in the Workplace (EOWA)

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions